Budgeting Skills

Learning to plan your spending is really important for everyone - it doesn't matter how much (or how little!) money you have, you need to budget. Follow some of the tips below to help you think about budgeting ...

Essential or Non-Essential?

Some things we need in order to get by - like food. Other things we want to buy - like DVDs. You need to decide whether you need something right away (essential), or if it can wait until you have saved enough money (non-essential). The essential things need to be paid for first, then you can decide to pay out for luxuries!

Moving into Your First Place

Kitting out your first home doesn't need to cost a fortune. You only need the basics when you first move in, and can get other things together as you go along. Friends and family might be able to give you some things they don't need any more, and you can pick up bargains at car-boot sales, charity shops and adverts in the local papers.

Bills

Don't be tempted to leave bills unopened - they won't go away! Heating, electricity and water costs should all be considered essential spending - look around for different providers to make sure you are getting the best deal.

Saving

If you are on a low income, saving might seem out of the question. But little and often can make a big difference - think about where you could afford to cut back and save the money instead. For example, if you saved £1 a day on snacks you would have an extra £365 every year to play with!

Research

By shopping around and thoroughly researching your purchases you can spend less. Look at the deals in supermarkets and see if they are a good deal for you - don't buy three for two if you don't need three! Buy own brands for basics and write a shopping list and menu each week so you buy only what you need. Shop around for mobile phone contract providers (or might you be better with a Pay as You Go?), utilities companies and internet providers.

Credit & Debt

Before you borrow money from anywhere, think about if it is really necessary. Do you qualify for a crisis loan, household grant or budgeting loan? If you do decide to borrow money, look closely at the interest rate. This means the total amount of money you will pay back on top of what you borrowed. For example, if you spend £100 pounds on a store card with a 29.9% interest rate, you will pay back £116.93. The FSA website has a tool which calculates repayments for different interest rates - as well as loads of useful information about managing your money.

If you do owe money, and are worried about how you are going to pay it back - don't ignore it! Don't borrow more money to repay debts either, think calmly about your options first. Talk to the people you owe money to, let them know there is a problem and you are trying to do something about it. Work out your spending - can you save money anywhere? If you need more help or want to get some advice about your options, contact the National Debtline on 0800 808 4000, or your local Citizen's Advice Bureau.

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