Piggy banks are not just the cute pig-shaped money jars for kids. Piggy banking is also a system of dividing your money into different ‘pots’, or accounts. It is also known as "jam jar accounting" or "the envelope method". Each pot represents a different aspect of your life you need money for. So, for example, you might have one account for your most important bills such as the mortgage or … [Read more...]
Budgeting and debt
Good budgeting is the cornerstone of dealing with debts. If your debts aren't out of control but you want to pay them off as quickly as possible, taking control of what you spend will help you get there faster. If you are struggling it's vital that you don't waste any money at all!
The basics are covered in Smarter Budgeting, then follow that up with some of these articles looking at specific areas.
Should you have money left each month but it just seems to vanish? If you are paying off debts, you may still want to put a bit aside so it's easier to cope with unexpected problems. This article looks at Chip and Plum, two apps that take the hard work out of saving. They move small amounts that you won't miss from your bank account into a savings account several times a month. I like them … [Read more...]
If you have decided to take control of your expenditure, you may get depressed when it doesn't all go to plan. Improving your finances is a journey – one that takes time and planning. And as with all journeys, there can be stops and starts along the way. Don't let these derail your plan! I'm talking in this article about a plan to clear your problem debts. This could be forced on you if you … [Read more...]
MoneySupermarket have found that in 2016 on average people are being charged an extra £73 to pay their car insurance monthly. And as more than 45% of people pay do this - up from about 40% in 2014 - that is a lot of extra profit for the insurers. Do people realise the extra cost? In May 2015, the Financial Conduct Authority published its Thematic Review of Provision of premium finance to … [Read more...]
You have debts but you don't think you need to budget? Very few people can tackle a serious debt problem unless they budget, so don't kid yourself that you are one of them. Here are eight arguments I have heard used to justify not budgeting - are they all bad excuses, or do you think some of them are good reasons? 1 "It's too complicated at the moment, I'll start next month" I'm writing this … [Read more...]
If you are in a debt management plan (DMP), an IVA, a Debt Relief Order (DRO) or have gone bankrupt, then you probably have little 'spare money' each month. It may seem very difficult to save anything - but you need an emergency fund even more because you will find it difficult or impossible to borrow in a crisis. A small emergency fund is your financial first aid kit If you can only save … [Read more...]
A lot of personal finance advice starts out with "Everyone needs an emergency fund". A survey showed that a third of middle-class families couldn't pay an unexpected bill of £500 without borrowing, so the lack of savings is a very widespread problem. But what if you already have debts that you are paying off? Accumulating an emergency fund will delay clearing the debts and increase the interest … [Read more...]
Having a cheap holiday at home may not sound a lot of fun. If you are trying to blitz down your debts (is that one of your 2018 New Year resolutions?) it can be a huge gain. If your credit card is maxed out you may not have an option - but you can make a deliberate decision about what you do instead. I asked some friends when they had done this and what they did, there were a wide variety of … [Read more...]
If you want to cut your expenses, food should be high up on your list. Food shopping is a large part of most people's budgets and it's also one that you have a lot of control over. It's not easy or quick to cut what you spend on rent, council tax or transport costs, but adopting a few new habits can help you reduce your grocery bill and still eat well. Plan, plan, plan Planning is the key to … [Read more...]
Without a good budget it's really hard to decide how to tackle your debts or to keep on top of them as you try to implement your chosen plan. This article looks at what goes into your budget and the different approaches people use that help them. Why budget? I wrote a long section here but Dave Ramsey has said it shorter and better: "A budget is telling your money where to go, instead of … [Read more...]