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How to survive on a single income

Managing on one income can be difficult, but taking control of your finances can help you stay on top of things. Read our advice on how to make the most of your income and budget effectively. Make sure you are receiving all the benefits you are entitled to. This is particularly important if you have had a change in circumstances, such as separating from your partner.  If you are receiving benefits, you may be entitled to get help with your mortgage interest payments. If you rent a property, you may be able to get help with the cost. Visit www.gov.uk for more information.

If you are working, you may be able to get help towards childcare costs through working tax credit. Some employers also offer a scheme where you exchange part of your wages for childcare vouchers. These vouchers will be replaced by a new tax-free childcare scheme in October 2018. You can find details and information on how to apply on the Government Childcare Choices website. You may also be entitled to child tax credit and child benefit. Read our article on rights and benefits for more information.  If your child’s other parent does not live with you or your child, you are entitled to receive child maintenance from them. Child maintenance is financial support to help towards your child’s living costs. Find out more at www.gingerbread.org.uk.

It may be worth thinking about other ways to earn money, too. Perhaps there is some freelance work you could do, or maybe you have a spare room that you could rent out. Selling unwanted items can also give you a welcome cash injection. Most of us can cut our outgoings by taking a few simple steps. This should start with a review of your mortgage, credit cards, insurance and utilities. Don’t be afraid to switch companies to take advantage of the best deals around. Comparison sites can help you find out which utility companies offer the best deals.  You should also tackle any debts you have. The interest you pay on most loans, particularly credit cards, is much higher than the interest you earn with most savings options. So get rid of as much credit card and personal debt as you can, and then start saving.

Check your bank balances regularly, and pay your bills, rent, or mortgage before anything else. If you struggle with large utility bills, speak to your supplier about paying weekly or monthly. You’ll probably find there is a discount available if you pay your utility bills by direct debit.  It’s also worth investigating whether there is a cheaper tariff offered by your utility company. You won’t automatically be switched to the tariff that offers the best value, so do your research and check that you are on the tariff that suits you.  You can also check that you are getting the best deals on your insurance. When you receive renewal quotes from your insurance company, don’t accept them straight away. It’s always best to shop around a bit first and gather up some quotes. By sticking with the same insurer year after year, you’ll miss out on the best deals – which are typically only available to new customers.  Once you have cleared your debts, consider setting up a savings account and putting money away regularly, however small the amount. You never know when you may need the money in the future.

Keep one card, the one with the lowest interest rate, in your purse, and cut the others up. Using only one card allows you to keep a better track of your spending. If you’re the type who likes to bump up against your cards’ spending limits, you’ll limit the damage to one card.

You may also want to consider getting a zero per cent balance transfer card, which will cut your interest costs on your credit cards. A balance transfer is when one credit card repays debts on other cards, usually at a better, cheaper rate. This could help you save money, although it is best to avoid spending on these cards while you are repaying the debt. You should also make sure you repay at least the minimum amount each month to avoid losing the deal and being charged at the standard rate instead.  If you tend to pull out your credit card when you’re short of cash, train yourself to use your debit card instead. You’ll avoid running up balances and you won’t have a bill to pay at the end of the month. Just watch that you don’t go overdrawn, though. Going into an unauthorized overdraft will trigger a host of expensive extra charges from your bank.

When you want to cut back, the best way is to carry out a personal finance audit. Write down every penny you spend for a month. It’s easier to priorities and cut down on unnecessary items when you know what you’re spending. When you go shopping, plan your meals for the week and stick to the list. Fewer trips to the shops mean fewer chances to load up on things you don’t need. If you’ve ever shopped at the end of the day with a screaming child, you know how easy it is to grab things without checking prices.

If you can, ask your partner or a friend to watch your children, and go to the shops alone with your shopping list. You’ll have time to comparison-shop for the best prices. Look at the unit prices listed on the shelf for the most accurate comparisons. Try not to be drawn in by special offers, unless the product is non-perishable and you have room to store it. Otherwise you could end up wasting things instead of saving on bargains. Alternatively, try doing your supermarket shopping online. It can make it easier to stick to a budget and resist buying unnecessary items on impulse. You can also use price comparison websites to check prices at supermarkets. It’s worth checking the delivery costs, as some supermarkets will deliver for less at certain times and on certain days of the week.

If your budget still doesn’t balance, it’s time to cut back on non-essential spending. This means prioritizing the activities you get most enjoyment out of, and spending less on those that aren’t offering you good value for money. Add up how much you spend on shop-bought sandwiches, magazines, coffees and more. You’ll be amazed by how much you can save and spend elsewhere. Ask yourself if you really need something before buying it. Then when you do buy an unnecessary item, it’ll feel like a real treat. Spending less on going out and buying new things isn’t easy. However, not cutting back now may mean you’re in an even more difficult position later on. You could end up with expensive debts that take a long time to pay off. When you receive your bank statements, check them to make sure that important transactions have been processed correctly – and to make sure that no suspicious spending is showing on your account. Checking your bank statements regularly will also help you to keep track of your spending. Try to review your spending every month. This will highlight where you may be overspending, and it may inspire you to cut back if you need to.

Original Article: https://www.babycentre.co.uk/a562842/how-to-survive-on-a-single-income#ixzz5UAQbGR1c