Credit Crunch: A Survivor’s Guide – Bills

The easiest way to save money is to look at your regular outgoings (bills) and see if any of these can be made smaller.

Rent is a difficult one unless you’re willing to move, but downsizing or moving further out-of-town can help. Remember to check to see if commuting costs will increase and whether the cost of moving and the hassle is really worth it. I wouldn’t want saving some rent money to be my prime motivation for moving. Although my sister moved back in with our parents when she was younger for a couple of years to sort out her finance and get herself into a position to buy a house.

Electricity and gas can be easily compared on websites like uswitch.co.uk and www.moneysupermarket.com. You may also be able to save money on your insurance, whether it be home insurance, contents insurance, car insurance, travel insurance, you get the idea… Basically with any kind of insurance you have the potential to save money just by shopping around.

Look at packages of insurance, home and contents together, or annual travel insurance instead of individual holiday insurance if you go away more than once. Never buy the travel-agents insurance as it will probably be the most expensive.

I saved nearly 50% on my annual worldwide travel insurance.

Look at your transport situation. If you travel on public transport, look at travel-cards, Oyster cards, or if you’re lucky enough you might be able to walk to work. I gave up my motorbike and a ten-minute journey to and from work, and instead walk for half an hour there and back. It not only saves me money but it keeps me fit! That’s what I tell myself as I trudge home on a Friday in the pouring rain in the dark on a winter’s evening!

Credit Crunch: A Survivor’s Guide – Budgeting

Budgeting is not scary, it’s not difficulty and it doesn’t take a genius to do it. You don’t need a degree in finance, or 25 year experience as an economist, nor to you need a financial advisor or book-keeper do it for you.

Budgeting is about knowing what your incomings are (wages normally), and your outgoings (mortgage/rent, utilities, telephone, cable, shopping, credit cards, etc).

Start out by printing off your monthly bank statement. If you haven’t got internet banking then sign-up now. The easiest way to have control of your money is to know how much you have and how much is coming out. This is budgeting.

Make a list of your income:

To make it simple and give you an example we’ll say you receive £1000 wages a month and you have no other income.

Now make a list of your direct debits, standing-orders, and any other monthly payments that you can’t get out of, this should not include any spending on shopping or food:

Rent:               £300.00

Electricity:             £100.00

Gas:                £100.00

Water:                         £20.00

Taxes:             £50.00

Insurance:             £10.00

Travel:             £20.00

So you start with £1000

When you’ve paid all of the above you’re left with: £400.00

This is your working budget. Spend more than this and you’re going into debt. Debt is the enemy! You should always try to spend within your budget. Food, clothes, going out, holidays, petrol, everything that is not a regular bill will come out of your working budget.

Check your bank regularly, internet banking and telephone banking are very helpful in making sure you are aware of your spending.

Budgeting is the opposite of dieting, but both work in the same (although opposite) way: there are only two ways to improve your situation, get more money in or spend less money. (Dieting is use more calories up or take less in).

Being aware of your financial situation, however bad it may be, is always helpful. Remember that knowledge is power.

Next time: Bills