Are you spending more than you earn? How it adds up.

Are you spending more than you earn? How it adds up.

Useful tips on how to gauge your household spending and how to keep in under control from Martin Lewis of the excellent Money Saving Expert site.

There’s no one size fits all solution for how much of your net household income should be devoted to each section of your household budget.
According to the Financial Services Authority one of the most important elements to getting control of your home budget is to do a budget plan.

Martin Lewis of the excellent Money Saving Expert site recommends doing a budget plan over a longer period than a week or month so that spending spikes like Christmas and holidays are properly accounted for. You should aim to have enough money every month so that you can pay into to an emergency fund.

A very general rule of thumb is that your rent or mortgage shouldn’t be more than around 45% of your net household income with around 25% to a third being the ideal.

If you rent or you have a fixed rate mortgage you can afford to pay a little more than if your mortgage is linked to interest rates, in which case you need to build in room to cover any changes.

Similarly, if you are undertaking major renovations on your home then you probably want to devote a smaller percentage of your income to your mortgage to ensure that there’s money put aside for building contingency.
The Financial Services website Money Made Clear suggests using a budget calculator to work out what works best for you.

If you decide that you’re spending more than you’ve got coming in, once you’ve done your budget, there are plenty of painless ways to cut your expenditure.

Think about swapping your service providers to cheaper deals.


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  • Set a limit for purchases and stick to it. (eg. Clothes/Presents)
  • You can save a third of your food shopping by making and following a weekly food planner. 
  • Buy in bulk. Items like rice and pasta are cheaper when bought in bulk which can save you a few pennies.
  • Coincide your trips to the supermarket to take advantage of the times when they put out the daily bargains.
  • Remember to buy food to make a packed lunch to take to work. Bringing food from home could halve the money you spend on lunch.
  • Credit cards are useful, but if you can’t afford to pay off the total balance every month, think about transferring the balance to another card and taking advantage of some of the excellent 0% finance offers that exist.
  • Get smart about what your bank offers you, some bank accounts offer free car breakdown cover – make sure you’re taking advantage of it if yours does.
  • Shop around for the cheapest insurance deals too. Make sure you’re not paying double for your insurance.
  • Don’t automatically renew your travel insurance when it expires, wait until you’re next going on holiday to restart the policy. 

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I have found that buying a £20 or £30 gift voucher with the large monthly shop helps. If I need it during the month, then I have it there, but 9 times out of 10, I don't - so the money builds up for Christmas, or other occasions. Also, I use coupons whenever I can, and I do the savings stamps at the supermarket too. In fact, I do everything I can to save the pennies!

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thannks for some usful idea it has help

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