Managing on a low income
Written by Zera Bacon Posted in Financial Planning
In times of crisis it may be difficult to find full-time employment, or an apprenticeship or you may have had your benefits sanctioned. Closely examining your current income and expenses will help assess your financial situation.
Here are 13 easy steps to help you manage your cash flow:
Create a Plan
Monitor what you are currently spending. List all bills and expenses such as rent, housekeeping, council tax etc
Calculate your weekly income and how much you actually spend and what you spend it on.
Look at your bank statements to determine how much cash you have been withdrawing.
Determine where your cash was spent. List every taxi ride, bus pass, restaurant bill, grocery purchase and everything else you can remember buying.
Total all your expenses for the week and compare this to what money you had come in. If your out-going is more than your income recognise you need to find ways to reduce spending.
Set some money aside each week for unexpected emergencies. There will always be something that will come up such as home repairs and maintenance, an unexpected dental condition or an emergency trip.
Prioritise what you need most. Examine all expenditures and determine what is essential. For example, food and housing are usually the most important.
Examine your mobile phone plan and usage. For example, you might be able to manage without Internet access from your phone; this could be a big saving.
Scan newspapers and flyers for food coupons. Stock up on items when they are on special. Buy larger-sized containers when possible; they cost less per serving. Try using a regular list to reduce impulse buying.
Reduce the amount of money you spend on gifts. For example, if you are invited to many weddings or birthday parties, stock up on gifts when you see them on sale. Many gift shops have seasonal sales where you might be able to gifts with deeply discounted prices.
Consider buying second-hand clothing. Many stores sell good quality items at a fraction of the price.
Change your habits: no more eating out in restaurants; drink tea/coffee at home. Calculate how much you can save by not buying that cup of coffee from Starbucks in the morning.
Find alternate things to do for entertainment. For example, rather than paying to go to the cinema or theme park, look for creative ways to have fun with friends. Have movie nights at home and pop your own corn in the microwave, you may find that it's actually more fun!