Top tips on how to budget when bills are rising

A LITTLE FINANCIAL PLANNING CAN GO A LONG WAY

MORE than half of households don’t have a budget they stick to each month, according to research.

But, with a number of bills increasing from April, and many people already feeling the strain, this could be a good time to take a closer look at your costs and spending.

Having a budget in place can help you gain a sense of control over your finances, and more than a quarter of people say rising costs have actually prompted them to start budgeting, the poll for wealth manager RBC Brewin Dolphin reveals.

The survey of more than 2,300 people showed that

18 to 24-year-olds are the most likely age group to say rising costs have prompted them to budget, while those aged 65 or over were the least likely.

When looking at what’s stopping people creating a budget, 14% say they don’t have the time, and one in 20 simply don’t know how.

However, it might not be as complex as some believe.

“Having a budget is the foundation stone of planning your household finances,” says Carla Morris, financial planner at RBC Brewin Dolphin.

“It gives you a month-to-month breakdown of your income and outgoings, making it easier to manage your money, identifying where savings could be made, and it gives you a clear view of how much you should be able to contribute towards your long-term financial goals.

“It is worrying that so many households do not have one in place, particularly given the financial pressures many have been put under in the past few years.”

Here, Carla shares some top tips for getting on top of your budgeting...

1 Take it right back to basics

“Coming up with a budget can be as simple as looking through what goes into your bank account every month, and what goes out. Make a budget work for you,” Carla says.

You can use software, or even just a notepad to write things down.

“There is no right or wrong way to do it so long as you have the right information,” she adds.

2 Can you boost your income?

If you regularly have more money going out than coming in, this could soon lead to problems.

“If your budget is not in surplus, then it’s unsustainable,” says Carla.

“If you want to increase your income and your job allows for the extra paid hours, that could be one option.

“Alternatively, you could look at starting a small business or project, although this may require some money up front.

“Or you can try selling belongings through services like Vinted, Depop, or eBay.”

3 Can you cut your spending?

“Sometimes it’s just not possible to increase your income, so cutting spending is the only option available,” Carla adds.

“Look through your direct debits – what are they for, and do you really need them? If you subscribe to multiple streaming services, cutting them down to one may be a straightforward way of saving hundreds of pounds per year.”

4 Be careful what you cut

“If you are cancelling direct debits, keep in mind how they fit into your long-term goals.

“Insurance can be among the first things people look to cut, but don’t sacrifice a benefit that may pay off in future years for a relatively modest short-term gain,” Carla cautions.

“Likewise, try to avoid cutting contributions to your pension, as small cuts now may make a big difference further down the line.”

5 Prioritise your expensive debt

Carla suggests checking the interest rates on your debts and prioritising the highest interest ones when clearing them.

If you are struggling, contact your lender to discuss the options and consider speaking to a debt help charity.

‘‘ Having a budget is the cornerstone of planning your household finances