Managing your money amidst rising costs
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Financial struggles can put a huge strain on your mental health, so at times like these it’s more important than ever to know how to manage your money. Here are some tips to help you get started.
With different bills to pay at different times of the month, it can be difficult to keep track of your money. A personal budget can give you a clearer picture. Start by looking at how much income you have coming in per month. This includes: Wages, Benefits, Pensions, Gifts from friends and family, Income from lodgers/property/non-dependents
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Hide AdNext, go through your bank statements and break down your spending into categories: Home costs, Living costs, Travel and vehicle expenses, Costs related to family and pets, Leisure, Future needs, Charitable donations, Debt repayments.
Maximise your income: It’s always worth finding out if you could increase your income. Check if you’re entitled to additional support by using the benefits calculator at gov.uk. Other ways to increase your income might be asking grown-up children who still live at home to contribute to household costs, or renting out a spare room to a lodger (make sure you check the terms and conditions of your accommodation before doing this).Structure your finances: At CAP, we recommend setting up three separate bank accounts. This may sound daunting at first, but it will make managing your money so much easier. You can do this on most banking apps. One for regular payments – this is where you’ll receive your income and pay bills. One for weekly spending – use this for day-to-day expenses like food, clothing and transport. Make sure you leave enough in your regular payments account to cover all Direct Debits and standing orders to avoid slipping into your overdraft. One for savings – place any money you have left over into this account and store it away for a rainy day.
Knowledge is power: Knowing your finances is helpful, but extra budgeting resources can make the difference between getting by and thriving. You can visit https://capuk.org/get-help/get-to-grips-with-your-finances to find out when the next free CAP money course is running in your local area.
Somewhere to turn: We understand that, for some, doing all of the above still won’t be enough. Each household is feeling the effect of the cost of living crisis in a different way. If you’re worried about costs this winter, help and advice is available at moneyhelper.org.uk. You can also get free debt help from organisations like CAP, StepChange or Citizens Advice if you need it. CAP in particular offers free practical, emotional and holistic support through debt counselling and you can visit capuk.org to find out more or call 0800 328 0006.
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Hide AdDuring this challenging time, many of us are looking for hope and a light at the end of the tunnel. Remember to check in on those that might be struggling and encourage them to seek help if necessary.