Right now, money is at the forefront of many people’s minds, and when you’re worried about your finances, even simple things such food shopping can cause a lot of worry and stress. Last year 1 in 5 people who contacted TASC wanted to speak to us about their money problems.

One of the most common topics we talk to people about is budgeting. Budgeting not only looks at ways to reduce expenditure but also things you can do to stretch your finances to help you live within your means.

On the face of it, setting a budget is easy; you look at your income, set a total spend figure and then try to stick within it. However, it’s much more complicated than that and many people have difficulty making a realistic budget that’s simple to monitor and control.

If you’re struggling, here are our Money Advisor’s top nine tips to help you create a better budget:

1. Know exactly where your money is going

When creating a budget, it’s important to know exactly how much of your money is going where, rather than estimating. The odd £5 difference may not seem like much, but it quickly adds up.

To start, grab your bank statements from the last few months, then write down your income and your exact outgoings broken down by type e.g. fuel, grocery shopping etc. At the end you will know exactly where your money is going and how much you’re saving or overspending every month.

TASC has a helpful income and expenditure calculator to help you do this. Click here to download our calculator.

2. Budgeting for shift allowances

If your income changes from month-to-month due to your shift allowances, unsociable hours pay or overtime, it can be tricky to know what to include in your monthly budget.

We recommend working out your average monthly salary over the last 12 months and then using this figure as your monthly income. If you earn anything over this amount, put it to one side.

Many of our service users find it helpful to put it in a separate bank account as it stops the money being eaten up by day-to-day spending.

3. Check contributions from others

If other adults contribute to your household expenses, such as adult children, partners or housemates, it’s worth checking if their contribution is appropriate for the amount of expense.

For example, if you live with your partner and three years ago agreed that they would give you £20 a month for their share of the electric bill, but over time your bill has increased to £60 a month, you are currently paying double their current contribution. By asking them to pay an extra £10 a month (where possible), they will be back to paying for 50% of the bill and you will be saving £120 a year.

4. Check for unused subscriptions

According to TopCashBack, the average UK adult wastes around £179 a year on subscriptions they don’t need.

We recommend checking back through your bank statements for the last 12 months to see if you’re still paying for unused subscriptions or insurances. This is a quick and simple way to save a lot of money. For example, if you pay for Netflix but you can also get it free as part of your TV/internet package, you could be paying up to £191 a year for something that you don’t need.

In the past, our service users have found free trials they have forgotten to cancel, streaming services that are free with their tv package and even insurance policies for appliances they no long have.

5. Look at fixed and flexible costs

When creating your budget, you should include ‘fixed costs’ which are the same every month and ‘flexible costs’ which will vary from month-to-month. For example, your fixed costs could include rent, council tax and utility direct debits.

Your flexible costs are harder to budget for as the amount you spend on them can change every month, for example groceries or childcare. They can also be costs that only occur a few times a year, such as MOT, new school clothes, insurance policies and haircuts. Try and account for everything you’re going to need to spend money on at some point.

To account for your flexible costs, you could:

  • Budget a set amount each month based on your previous average spend. In the months when you spend less, you can add the leftover money to your savings which you can then draw from in the months when you need to spend a bit more.
  • Revisit your budget each month to plan and tweak it based on upcoming events. For example, if you know that your MOT is coming up next month, plan to spend less on haircuts, takeaways or days out that month.

6. Track your spending

Tracking your everyday spending is the easiest way to keep on top of your outgoings. All it takes is just a few minutes at the end of every day to write down what you’ve spent. You could do this on an app, Excel sheet or even a bit of paper.

TASC has a helpful tracking sheet to help you do this. Click here to download our tracking sheet.

7. Set a meal plan

Groceries can be a big part of your household spending, and when shopping many people can be tempted by promotions and impulse buys which can push up your expenses and blow your well-planned budget.

Before you go shopping, try and create a weekly meal plan and then create a shopping list and stick to it. Not only will it help you save money, but you’ll also have a number of tasty meals to look forward.

Don’t forget to also check your cupboards to see what ingredients you can use up. TESCO run a free online tool which offers recipes based on your spare ingredients. Take a look here.

8. Consider alternatives

Cutting out unnecessary costs is the quickest way to make your money stretch further, however with a bit of creativity that doesn’t mean you need to go without. A few small changes could make a big difference. Here are a few examples:

If you usually buy a medium latte from a high street coffee shop every week day, you could be spending up to £79 a month/£952 a year. Instead, you could buy yourself a reusable coffee cup for as little as £13 and then a year’s supply of instant coffee online for £24. If you make it with milk instead of water, you would need around four pints a week, which is currently around £1.60 (prices based on a search of a UK supermarket’s website in October 2022). This means the total you would spend in one year would be around £120, or £20 a month, meaning a saving of £832 across the year.

If you buy a certain magazine every month, and you also currently have a streaming service, you may be able to access it for free online as some services now offer subscribers access to range of magazines for free every month, such as Radio Times, Rock, Better Homes, BBC Easy Cook, SFX, Auto Sport, Woman’s Own and Digital Photographer. By switching to an online version of your magazine through Prime, you could be saving around £3.00 a month, or £36 a year.

If you currently buy a lunch meal deal from a supermarket every week day, you could be spending up to £92 a month/£1,104 a year. Instead, if you brought a lunch from home just two days a week, you could save up to £16 a month/£192 a year (assuming the food you brought from home cost you £2 a day).

9. Try to budget for savings where you can

If possible, always try and include an amount for savings in your budget. It can be as little or as much as you can afford. Some people aim to put £5 a week aside, others use a percentage of their monthly salary, just aim for what works for you. As well as helping you build long-term savings, putting a little aside every month can help you grow a buffer for those unexpected costs such as replacing a broken phone, needing a new car part or emergency childcare.

TASC benefits checks

Our in-house advisor offers a range of services to help with your finances, including benefits checks. Many people don’t know that they’re eligible to receive benefits from the Department of Work and Pensions. There are lots of different types, each with its own set of rules, and your eligibility will depend on your personal circumstances. This is where TASC comes in.

You don’t need to know the rules of benefits, as our Money Advisor is an expert in this area and can do the work for you to see if/what you’re entitled to.

TASC’s Money Advisor, Julie says:

“Benefits can be incredibly confusing, but it’s important to remember that benefit entitlement is a right, not a handout. Please don’t feel embarrassed or uncomfortable about speaking to us about them.”

To apply to receive a benefits check, please contact us.