Whether you are comfortable with your finances, or are just scraping by, taking the time to get on top of your household budget is an important step.
Research has shown that many people forget to cancel standing orders and direct debits and can go on paying for unwanted or unused subscriptions for prolonged periods of time. And this is the reason why carrying out an audit of your finances is a great idea, even if you aren’t experiencing difficulties.
Careful homework pays
If you are worried about debt however, the best thing to do is face the reality of what you have coming in and going out every month. Although you might think you have all the figures in your head, sitting down and going through a bank statement item by item, might throw up some surprises. You may find you are paying more than you thought for certain costs or services, whilst there may be other payments that can be cancelled. Once you have all your expenditure worked out, you can take the opportunity to see if there is any way in reducing how much you have to pay.
There are a number of ways you can do this. Firstly, how long has it been since you switched your energy supplier? Energy companies know that many people never bother to change their supplier, so put a great deal of effort into attracting new customers whilst not makingdeals for existing customers particularly great. Therefore, whilst you stay with the same supplier, you will be missing out on the cut price offers available if you make the switch. The same principle applies to insurance, both house and car. There are times when remaining loyal pays but this is not one of those occasions.
Savvy food shopping
Food shopping is another area where savings can be made. Many families shop in a particular supermarket either out of habit, or because it is convenient. However, a price war has erupted between the high street supermarkets, which are all competing fiercely to get shoppers through their doors. Switching between stores to get the best deals on offer means you could slice a fair chunk off your shopping bill. Buying in bulk is another option you may not have considered, but it could help you purchase goods much more cheaply.
All of the above could make a significant difference to the amount of money you have to spend out on essentials but you also need to take a good look at what you are paying to clear your debts.
Finding an affordable way to get out of debt
Sometimes it doesn’t matter how frugal you are, with ever increasing utility bills, food prices and petrol rates, your budget can really take a battering. If you’re trying to get out of debt, one of the best things you can do is to look at your finances, identify ways to cut spending and set a plan in place whereby you increase debt repayments. However, this is becoming a difficult task for many households, because they just don’t have any spare cash available.
There are specialist debt management companies such as Baines and Ernst, who could speak to your lenders on your behalf, negotiate a lower repayment rate for you and manage monthly repayments – helping to ease pressure surrounding debts. For example, they could help you to consolidate debts into a lower monthly repayment with a solution such as a Debt Management Plan or an IVA. These solutions are both designed to help you repay debts at a rate you can afford and give you the breathing space you need to get back on your feet.
A Debt Management Plan is a flexible solution, so you if you want to increase repayments when your circumstances improve and clear debts in a shorter amount of time, you can.
An IVA is a legally binding solution which normally lasts for 5 years, debts can also be written off at the end of this period if they still exist. And as both solutions are not forms of lending, you will not be credit checked to qualify.
Making small changes to household spending could have a positive impact on your budget, but if you are in financial difficulty and need some support, it’s reassuring to know that you’re not alone and that there is help available.
There is further reading on this subject on ukmoneymarket.co.uk.