What a difference a year can make!
January can be a difficult time financially for lots of people, but it can also be a time for reflecting and making plans to improve things.
If you’re worried about your finances, it’s not uncommon to feel like you want to bury your head in the sand, but things can spiral out of control if you don’t address them. So, make space in your life to get back in the driving seat and feel more in control.
Here are some steps we suggest may help:
Create a Budget.
Making a budget is the first step towards taking control of your finances. It will help you see where your money is going and where you may be able to make savings.
Work out your total monthly income.
Make sure you include everything, wages, tax credits, child benefit, pensions. If some of your income is paid weekly or 4 weekly, you’ll need to turn these figures into monthly ones. To do this multiply the weekly figure by 52 and then divide by 12. This will give you a calendar monthly figure for your budget.
Make a list of everything you spend each month.
Start with the most important bills, such as your mortgage, rent, council tax and utilities. These are classed as priorities as they have the most severe consequences if your payment is late or missed.
Make a list of what you spend on living costs.
Such as food, clothing, TV, internet, mobile phones. Don’t forget to include what you spend on things that occur less often such as birthdays, Christmas, car repairs. Try to come up with a monthly figure that you need to set aside for these less regular expenses.
Deduct your outgoings from your income.
If there is a deficit, you know that you need to make some changes. So, what can you do?
There will be some expenses that are difficult to reduce but others may be easier. For example, if you’re spending money on take aways, buying lunch out, getting a coffee to take away, these are all expenses that can be reduced easily. Often people have subscriptions to services that perhaps they don’t use as much as they thought they would. Look at these things first and prioritise where you are spending your money.
If you’re paying £200 p/m on leasing a car and struggling to pay your mortgage, you may need to re-think whether in the current climate you can afford that car. Is it possible to get a cheaper vehicle or buy a car outright.
Check that you are getting everything that you are entitled to.
For example, if you are the only adult in your household, you may be entitled to 25% off your council tax bill. There’s lots of information available on the government website with links to organisations that can help with advice.
Most importantly, ask for help!
Don’t be embarrassed. Speak to anyone you owe money to and see if they can help. If you have a mortgage and you’re struggling to keep up with repayments, speak to the lender or a mortgage advisor. It may be possible to extend your mortgage term and reduce your committed expense or take a payment holiday to help get back on track.
Take advantage of all the information.
Advice and support that is available from charities such as Stepchange, Citizens Advice and the Government website.
Just remember that whilst the process may not be comfortable and may involve making some difficult decisions, ultimately going through this process can help put you back in control of your finances. Make reviewing your spending a thing you do regularly so you can prevent things getting out of control…….and what a difference a year can make!
Why not make a short 15-minute phone call to our freephone mortgage helpline to get started? All you need to do is phone us directly on 0333 005 0333, or text ADVICE to 82228.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 18/01/2023
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