Only last month, the Institute for Fiscal Studies (IFS) warned that household budgets in the UK could be squeezed for the next 10 years, as the impact of tax rises and cuts hits many people’s finances hard.
This being the case, many families may have to keep a tighter hold on their purse strings than ever before, as every penny has to stretch that bit further every month. Living within your budget successfully, however, doesn’t have to be complicated – and following just a few practical steps could make all the difference.
Let’s look at a few basic tips for frugal living that could have a big impact on your budget.
Keep an eye on your account
Many people find they get into bad budgeting habits if they start to lose track of what they’re actually spending and earning every month.
Think about keeping track of what goes in and out of your account every month by regularly checking your statements. Consider registering for online or telephone banking, which could help you stay on top of your money even if you’re on the go – ideal if you live a busy lifestyle. Mobile banking is very common these days, and some banks even have their own specially designed ‘apps’ so you really can bank on the go.
Some accounts are even designed to help you budget, by putting money aside for your essential monthly expenses – so you can be confident all your financial commitments are being taken care of. Why not look at a budgeting bank account and see if it’s a type of bank account that could work for you?
Put money into savings
Another common cause of over-spending is if you’re hit with any unexpected costs, e.g. if you have to cover the cost of dental bills or you have to pay someone to fix a broken radiator. If money’s already tight, you could see these sudden costs break your budget.
However, putting some of your disposable income into savings every month could give you a fund to fall back on in hard times – and reduce the likelihood of you falling into debt problems to cover costs. Saving in the long term could also help you to comfortably afford any larger expenses you have planned – such as a holiday or redecorating the house.
Reduce your outgoings
Taking a frugal approach to your finances could really help your budget to work successfully. Cutting your monthly costs could free up a bit more money every month, which you could put towards savings or ‘overpaying’ any debts you have.
You could reduce your outgoings by:
- Taking advantage of discount vouchers and offers when shopping at the supermarket or eating at restaurants
- Taking only the cash you can afford to spend when you go shopping – and leaving your credit/debit cards at home
- Taking a packed lunch to work every day rather than spending money in cafes and coffee shops.