Budgeting is vital for low income families to make sure they keep their heads above water.
Making slim resources stretch as far as possible takes a lot of careful organisation, but, according to the government’s Money Advice Service, there are steps you can take to make life a little bit easier.
Work out your budget
Working out a budget gives you a much clearer idea of your finances. You know how much is coming in and how much has to go out. Importantly you also know when those events occur and can plan for it. It also shows you where you might have a chance to save money.
Cut costs – shop smart
You may not be able to change the amount of money coming in, but you have a lot more control over what goes out and your budget will show you how you can make savings by cutting out regular purchases which may be non-essential. Even small things add up if taken regularly.
Have a close look at things like your utility bills and the possibility of switching to another supplier, travel costs, energy saving grants and keep your eye on how much you’re spending at the supermarket and what on.
Claim all the benefits you’re entitled to
If you’re on a low income you will be entitled to help from a number of sources. Are you sure you’re taking advantage of them all? Some benefits are one-off payments (like the cold weather payment) but others top up your regular income. Make sure you’re getting all you’re entitled to.
Think twice before you borrow
Prior to April 2013 you could apply for a crisis loan to tide you over a difficult patch. These have now been replaced by different forms of financial help provided by your local authority covering such things as rent paid in advance, pre-paid meter fuel debt and travel expenses if stranded away from home.
It might also be possible to get an interest free Budgeting Loan from the Social Fund to help with buying things like furniture or household equipment, clothing or footwear, advance rent or removal expenses for a new home, traveling expenses, money to help you start looking for work, improving, maintaining or securing your home.
Beware of other forms of borrowing like payday lenders, log book loans or doorstep lending. They may be tempting and easy to obtain but could end up making a bad situation worse.
The overall message is: Take control of your finances
