Living on a Budget
Today we have a guest post that can help our UK readers estimate how living on a budget can help them get ahead financially. Enjoy!
In 2015, the minimum monthly household expenses for a UK region was an appalling £427.50; with the largest sum being £616.30 in Greater London. Clearly our expenses are getting the better of us, so it’s about time we reined in the unnecessary spending and started setting weekly, monthly and yearly limits. However, if you’re unsure on how to approach your cost cutting, read this simple guide on how to live well whilst saving well.
Your first task towards a more cost effective life is to create a budget plan that clearly outlines your current overheads; this will make figuring out A) how much you are spending and B) what’s costing you the most much easier. Do not start budgeting unless you have answered this essential criteria – it’s not something than can be done overnight as you’re essentially changing the lifestyle you’ve become accustomed to. You could produce this in an Excel spreadsheet for better organization.
You’ve gathered all the relevant information – great, now you can initiate the next phase, setting goals. It is vital these are both achievable and practical (for example decrease your heating bill by £30.00 per month) to ensure they’ll actually help when budgeting. Place these in a mutual location (e.g. on the fridge or a pin board) so everyone in the household can see them and are therefore start striving to meet them.
Differentiate Between Wants & Needs
Food, water and shelter are needs, for you cannot survive without them; whereas designer handbags and exotic holidays are wants. Characterizing the differences between the essential and the desirable will give you a reality check on what you can actually live without; helping you to spend less on the wants and focus on the needs.
Suit the Situation
Tempting as it sounds, searching online for a planning template simply won’t be beneficial. Each household has different circumstances to cater for, so a budget for a family of five will be completely useless for someone living alone. You should consider the following:
- How many people live in your home? (Including guests).
- When do you get paid? (Weekly, bi-weekly or monthly).
Fix & Update
Discarding and replacing perfectly fixable furniture for the sake of a little DIY is both wasteful and expensive. If your chair legs are unstable and loosening, tighten the joints. Adding a splash of paint to outdated kitchen cupboards or picture frames can do wonders and make them appear brand new.
Running ten lightbulbs for an hour costs an astonishing 7.3p and although this seems like a miniscule amount, it soon impacts your bills. Take advantage of daylight and optimise your natural lighting by opening the curtains and keeping your windows clean. Worried about your heating? Turn down the thermostat and switch to hot water bottle and blankets for extra warmth.
Why spend a fortune on brand new furniture when there are cheap, second hand substitutes, for example – if you require more storage, invest in some plastic containers instead of purchasing an oak wood storage cabinet. Decorate them with unused scraps of wrapping paper for a more stylish feel.
Searching for homely decorations doesn’t limit you to lavish antique ornaments and overpriced art deco pieces. There are some brilliantly inexpensive ways to give your home charm without breaking your bank account. Houseplants add freshness and a subtle touch of colour; these can be purchased at supermarkets for a fraction of gardening centre prices. If you’re feeling extra creative, make your own cushion and sofa covers from scrap fabric pieces found in second hand shops.
Make a Budget
A recent study identified that a UK household spends £60.00 a week on groceries alone; which works out to over £3,100 annually, and considering a family with children disposes of over £700.00 in wasted food, you’re potentially buying more than needed. Implement a weekly or monthly food budget that limits each household member individually to make it more reasonable and easier to control.
Conducting some supermarket research would also be advantageous. In May this year, Aldi once again triumphed over other leading UK supermarkets in the battle for money saving value. Overall Aldi was £10.68 cheaper than ASDA and over £20.00 cheaper than Sainsbury’s.
According to recent findings a vegetarian diet can save you £530.00 a year compared to a meat filled diet. However, if you’re finding it hard to give up meat cold turkey, gradually introduce some vegetarian meal replacements throughout the week, allowing your household to slowly adapt to the diet change whilst saving money.
When purchasing meat stick to cheaper economy cuts – chicken wings, sausages and even organ meat; combine these with vegetables to cook tasty, low-cost meals like soups, casseroles, stews and bakes.
Stock Multipurpose Foods
Not all food has a long lasting best before date. Be sure to fill your cupboards with staple foods for cheap and quick back up meals:
– Dry Bean
– Tinned Tomatoes
– Cooking oil (light olive oil)
– Tinned fish
– Frozen vegetables
The time of year actually impacts the pricing of certain fruits and vegetables – if they’re out of season, they become more expensive due to the more complicated growing process. Seen as though it’s summer, focus on buying: cherries, strawberries, asparagus, cauliflower and mangetout. A few vegetables can fortunately survive even the harshest of winters, enabling them to be purchased all year – sweet potatoes, cabbage, celery and carrots for example.
Cut the Luxuries
Banish Bad Habits
Habits are not a need, despite what your brain might tell you. Last year the average 20-a-day smoker spent £3,000 on cigarettes, almost a year’s worth of groceries… Attend free support groups for extra help – kicking a habit permanently isn’t easy. This will really test how dedicated you are. For all you workaholics, start brining your own coffee into work or wait until you arrive – buying a coffee on every early morning will cost you approximately £519.00 a year.
Limit Your Clothes
Ask yourself the following question: how many outfits do I actually wear? Separate your wardrobe into two piles, keep and discard, to work out whether you actually need new clothes. Afterwards, sell your unwanted garments online or at car boot sales; the money earned can be reinvested into new clothes without needing to dip into your budget. When you hit the shops stick to sale racks and avoid high-end brands – there is also no shame in shopping at charity shops.
Britons spend an estimated £4,000 a year on dining out; which equates to ¼ of the average living income. Save leftovers for the nights when you feel unmotivated about cooking to make your food go even further. Creating a weekly meal schedule will limit you to only buying the necessities and ensure the preparation time for each meal complies with your daily routine.
The UK wastes £37 million on unused gym memberships annually, and with the average yearly cost of £422.00 per person, are you actually getting your money’s worth? Realistically you can exercise anywhere, so ditch the gym and pan your own weekly routines (Monday – run for two hours, Tuesday – cycle for two hours, etc.). Keep social by organising a weekly exercise group that meets in the park.