Money is incredibly tight for many families this year. 2020 has seen job losses and redundancies for thousands of households, and it doesn’t look like we’re out of the woods just yet. The Covid-19 pandemic really does have a lot to answer for. If you’ve seen a drop in your household income this year, then you’ll need to be more careful with your money.
I’m in a very fortunate position at the moment. I work from home anyway and although my husband was furloughed for a short time, he was still paid 100% of his wages. Despite this, I am still being more cautious with our spending and making sure we’re not overspending on unnecessary items. Nobody can predict what the next 12 months will bring, and whilst we can hope that things do improve, it’s sensible to be careful with our money at the moment.
Know your budget
It might seem scary, but knowing the figures is vital if you want to get a tighter grip on your finances. Sit down and work out exactly how much money you have coming in and how much you have going out. Only by doing this can you start to see where you need to make cutbacks.
It’s a good idea to use a personal budget planner so that you can see these figures broken down really clearly.
What if your expenses are greater than your income?
If you’re in the really difficult position of having more money going out than you have coming in, then it’s time to make some drastic changes. I have been in this position in the past and learnt an awful lot of lessons.
Firstly, make sure that your priority bills are paid before you attempt to pay anything else. Priority bills are the ones that keep a roof over your head and provide power for your home. These would include mortgage/rent, utility bills (gas, electricity, water) and council tax. It’s really important that you keep on top of these.
If you have debts that you’re struggling to pay, then it’s time to get some professional help. There are lots of debt charities in the UK that will help you to figure out the right path without charging you a fee for their service. Stepchange Debt Charity is a great place to go for help.
Plan, plan, plan ahead
When you’re trying to keep control of your finances, it’s really important to plan ahead. This applies to all kinds of things, whether it’s taking the kids for a day out or having the grandparents round for a meal. You need to know exactly what you’ve got coming up so that you can budget accordingly. Obviously if you’ve got children or own your own home then there could be unexpected expenses, but planning ahead for the costs you do know about will still be a great help.
I sit down once a week and write out our meal plan. Then, I create a shopping list of everything we need and only buy things from my list. This means I’m not wasting money on unnecessary items that we don’t need and I’m also making sure that our fridge and cupboards are stocked up with enough food to last us through the week.
Batch cooking can be a great way to cut cost, it can also help you to eat a healthier diet too. If you have time, then it’s a great idea to cook up a whole batch of food that you can then stick in the freezer ready to just pull out as and when you need it.
Make do and mend
Many of us are guilty of throwing things out when they could quite easily be fixed. I bought my five year old some new school shoes from Clarks in August – they cost around £42. Earlier this week, he came home with the front bumper partly coming away. It turns out he’d been putting his chair leg there at school! Rather than throw them out, we’ve superglued them back together and they’re now as good as new again. There are plenty of things you can mend rather than throwing everything away and buying new.
If money has suddenly become tight this year, whether as a direct result of Covid-19 or from any other reason, then it’s time to tighten the purse strings. It doesn’t need to be too complicated, but even a few simple steps can help you to take back control.