The average UK wage is estimated at around £400 a week. Once you have paid your rent, council tax, utilities and other obligations, there isn’t much more left on that kind of budget to pay for your other expenses, such as food, clothes, hygiene and so on. Let alone for saving money.
So how do you get more breathing room in your budget?
Some companies, like Guy Mackenzie‘s Loanable, can offer short term loans and temporary relief, but over the long term, this is not a solution you want to have to rely on.
Spending less and earning more are really the keys to building savings and being more stable financially.
Cutting back on fixed costs should be your first step. A quick online calculator will tell you if you are paying too much for broadband, phone and utilities, and switching over to another provider can save you hundreds of pounds every year, while the switch itself takes a matter of minutes.
Once you see the power of just a little phone call to reduce a bill, move on to your debt providers. You can switch to a 0% balance transfer credit card, or even refinance your mortgage, and save thousands in the process.
Remember, savings only work if you save the difference, and do not revert to spending it mindlessly somewhere else.
Then, focus on reducing waste in your life. Do you throw food away every week? Can you make a grocery list and plan your meals instead? Do you really need that subscription or membership? The same way, a quick phone call can take care of canceling the charge for you.
Last on the spending less department, is life optimization. Like waking up 5 minutes early so you can brew your own coffee and pack a lunch bag. £10 saved a weekday amounts to £200 a month. That is a lot to put towards debt repayments or savings.
Once you have reduced your expenses, you will reach a place where it is hard to cut back more. If money is still tight, it is time to make more!
You can make more at your day job by staying an extra hour every day, or asking for a promotion. That is the easiest way to increase income as you won’t need to commute or look for another job.
You can work for yourself on the side, tutoring kids in something you are good at, teaching a yoga class on the weeks, or walking your neighbour’s dogs.
Or you can even start your small business, there are free website templates online that will get you setup quickly, and put your services out there. It can seem daunting at first, but even if you only make an extra £50 here and there, the difference can be huge over the long run.
From buying old things at car boot sales and reselling them on eBay and Gumtree, to renting an extra room in your house (for which you can get up to £7,500 tax free!), there are a lot of ideas out there on how you can make a little extra money.
Debt and tight budgets do not have to be a forever trend, with discipline and motivation, you can build a bright financial future!