If you’re spending more than you have coming in, it's time to work out where you can save money.
Being able to manage your money on a day-to-day basis can sometimes feel a bit overwhelming to start with, but closing your eyes to the situation you find yourself in just puts you at further risk of spiralling into debt.
Do you have any money management tips? Tweet us @WiganCouncil (external link) - we’d love to hear and share your ideas.
Top tips for managing your monthly income
Create a budget plan
It might seem overwhelming to start with, but looking at how much you have coming in, what money you have going out is a really important part of budgeting.
Write a list of everything you spend, including household bills, living costs, any insurance or interest you might have to cover, money you spend on family and friends, travel and leisure.
Involve the whole family in your budgeting
Call a meeting and sit down together to form a plan you can all stick to. Work out how much money is available and agree between you how much you will each have.
Don’t bury your head in the sand
Check in with your finances every day. Each day, your bank account offers a unique snapshot of where you’re at financially, and it fluctuates regularly. Checking in each day puts you in a strong position for understanding when certain bills and different pots of money will be going out, allowing you to react accordingly.
The piggy bank method is where you have different pots of money for different purposes, making the most of the lists you’ve made earlier. There are now lots of apps that you can use to do this automatically as you spend, so do some research online to find out what might work best for you.
Divide your income 50/30/20 - it all adds up
Another method of budgeting is to divide your monthly after-tax income into 3 spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt.
This can help you to mentally box off what you are spending, where and when, putting you in control of your finances.
Set a daily and weekly budget too
Breaking it down can make the task seem less overwhelming and doing a daily and weekly budget allows you to reflect on any overspending (or underspending!) you have done.
Money talks - speak to friends and family
Don’t fall into a spiral of debt. Money can be a difficult conversation to start, but many of us will be experiencing the same issues this winter. You can share tips, or even get support on your wellbeing by being around a strong support system.
Pay with cash, not credit
It’s easy to get into debt but not quite so easy to get out of it. As well as paying more in total for purchases over time, by paying with credit you're also accumulating more debt if you don't pay your bills off from month to month.
There is also the perk of knowing that once your purchase is made, you’re done with paying for it and won’t be paying it back for months or years to come.
Expensive habits and addictions
If you’re living with an expensive habit like smoking or drinking it can eat up a significant amount of your budget. It’s estimated that the average smoker can save at least £240 a month which can be enough to feed a family of four for a month.
We know that quitting can be hard, especially in times of stress, but there is help available so you’re not on your own. Our Healthy Routes advisors will give you 121 support to guide you through the process. Those on low incomes can access FREE nicotine replacement products and the programme starts with a 4 week adjustment period where you get your mind ready to take on the challenge. Even if you’ve tried to quit before, you’re more likely to succeed if you’ve got the right support in place.