Barry Matthews, never gave much thought to money—until the day came when it home that he was broke.
He had the well paid job, a house and car people admired, but both he and and his wife, Maria, also had no money saved, had maxed out their credit cards and were in their overdraft.
Both Barry and Maria would overspend and not really question how much things cost, they only thought about what they needed day to day, until one day Barry had a call from his very upset wife who had her card declined when buying food shopping. “It was shameful and embarrassing and a real wake-up call,” he said. Barry and his wife decided to go on an extreme spending diet and cut every expense they could. They both knew things had to change.
It became their goal to stop living payday to payday. They eventually sold the car which saved them £480 a month in repayments, cancelled their additional tv package and put all breaks / holiday plans on hold. Barry started working overtime and taking on odd jobs to try and make additional income, whilst Maria sold a lot of her designer clothes online. “We completely changed our living habits, and over a eight month period we paid off £35,000 in debt!”
Today both Barry and Maria follow a strict budget but have broadened their budget to include savings, retirement savings and pay holidays in installments. Maria now works as a Financial Advisor and shares her money saving tips and advice online.
Setting goals is the first step toward creating any kind of financial plan. A budget to achieve your goals doesn’t have to be painful. “You just have to get in the right mindset,” Maria says. “You’re not giving up something—you’re gaining something by choosing yourself first, not just for today, but for the future. You deserve better than to work hard and have nothing to show for it,” she adds.
Consider trying the following steps to sharpen your focus, scale back spending and achieve your dreams.
Write Down Your Goals
If you don’t put your goals on paper, it’s not going to happen
The more laser-focused you are, the better
Think hard of where you want to be and when, then write down a time frame, put it where you can see it every day, and monitor your progress.
Figure Out Your Priorities
What are your priorities? Food, housing, insurance and health? Surely these are a must. Health and Life insurance specialists4protection.co.uk can maybe help with finding you a cheaper deal. But non-essentials like dining out, shopping, movie-going, holidays and other extra spending are ripe for cutting. You’ll need to figure out which ones are important to you.
“You can want it all, but you can’t have it all, you have to choose.” Be careful not to become too austere. Leaving no room for leisure can make cutting back a big downer rather than something uplifting.
Assess Your Spending Habits
Review your statements from the last few months to see where your money’s been going and what might be dragging you down. “Look for patterns and see where you can cut back,”
Small costs like taxis, coffees out or a sandwich/cake from the bakers at the time may be small, but over the weeks these will add up. Do treat yourself to something small, but do not make a treat a habit.
Keep It Simple
A budget can be overwhelming. Be realistic about your lifestyle and habits, and only get as detailed as you want.
If tracking your daily expenses is too burdensome, track them weekly or monthly instead. “People make it more complicated than it needs to be,”
You can simply put money in your bank and have a portion automatically transferred into savings. Whatever is left over is what you can spend.
Plan For The Unexpected
Budgeting for emergencies like home repair or car repairs will provide a buffer without blowing your budget. It’s smart to plan ahead.
Budgeting requires willpower and the ability to abstain. To stay on track, throw out catalogues, unsubscribe to emails that promote sales, avoid getting caught up in yearly "Shopping Sales" and overspending on things you don't really need.
Increase Your Income
In addition to cutting expenses, consider increasing your income too, by taking on a part-time job or selling possessions that are taking up space. Using companies like Uber and eBay could be a quick way to start.
Find Creative Ways To Save
There are many ways to cut back: Eat more meals at home and pack lunches for work; choose less expensive alternatives to top-shelf electronics and makeup; and opt to purge, not splurge, when it comes to clothes. In addition to cutting variable expenses like these, try these strategies for cutting fixed expenses:
If you have credit card debt, call your card issuer and ask for a reduced interest rate, or transfer your balance if it means long-term savings (but beware of interest rate hikes when the initial rate expires). Consider canceling annual fee credit cards. Leave your cards at home and use cash or cancel the card and pay off the debt so you are not tempted to use the card and don't build any further interest.
Look at the subscriptions or memberships you have that renew on a monthly or annual basis, and only keep the ones you can’t live without. Exercise outdoors or at home instead of at the gym. Cancel apps with recurring fees.
To reduce monthly payments, inquire about bundling. You could qualify for a multi-policy discount if you purchase all your insurance (health, life, pension, car, home, boat, etc.) through the same broker. You can also see if you qualify for discounts on the really important stuff like health, life insurance and pensions. Call 01243 210190 to review your policy with a licensed agent to make sure you’re getting all of the discounts you qualify for or visit specialists4protection.co.uk
Want more support? Money management websites like http://www.moneysavingexpert.com have good hints & tips and offer a number of features and tools to help keep you accountable, also the government backed Debt Advice service http://www.national-debt-advice.co.uk if you have accrued to much debt to be able to pay off and still be able to cover your living expenses and vital bills like Rent, Mortgage, Council Tax and Utilities.
Quotes shown are for a 40 year old male who doesn’t smoke. Policy is £100,000 life insurance cover for ten years with a fixed premium. Example is for illustrative purposes only and was correct on 21/11/2016.
The most common form of protection, ordinary term life cover pays a lump sum to your family if you die within a certain time-frame. Most policies will also pay-out if you’re diagnosed with a terminal illness and have less than twelve months to live
Critical Illness Cover provides a cash lump sum if you suffer from a range of serious conditions within a set time-frame. The money is normally used to pay the bills and provide financial security while you’re on the road back to health
If something serious happens to stop you working - for months, years, or even for life – you’ll want to know you have financial security and that the bills are paid. Income Protection gives you just that, paying a percentage of your income all the time you’re unable to work.
The NHS is groaning under the weight of the UK obesity crisis and newer, more effective medical treatments for a range of illnesses often aren’t available. Private medical cover makes ‘going private’ much more affordable – giving you access to more treatments, shorter waiting lists, and first-class care.
Most company directors are savvy enough to have life insurance, but very few realise they can save up to 53% by taking advantage of a Relevant Life plan.
Group Life and / or Health Cover is the most cost-effective way to provide peace of mind and financial security for the families of your employees.
Key Person Insurance - often called Key Man Cover - is an insurance policy bought and owned by a business to protect its own interests. Cover is provided in the event that an important staff member is suddenly unable to work through critical illness and/or death.
Shareholder Protection Insurance is designed to give you peace of mind in the event that a shareholder in a Limited Liability Company, a member of a Limited Liability Partnership (LLP), or a partner in a partnership dies or is diagnosed as critically ill.
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