Households across the UK have had their financial situations and budgetary capabilities altered greatly due to the coronavirus pandemic. With so many people struggling due to inconsistent employment or ill health, it may have become even more difficult to manage your money.
Budgeting is an important part of planning ahead, but in recent months, the plan has been drastically changed. As such, it is imperative that people reassess their financial limitations and set a newly adjusted budget that is more consistent with their current situation. Here are a few tips for establishing your new budget:
- Include everything—Budgeting for necessities like rent, groceries, credit card payments and the electricity bill may come easily, but when putting together a thorough plan, it is important to also include expenses like social events and other non-essentials.
- Document expenses—It may be difficult to know exactly what you generally spend on irregular purchases and events, such as coffee in the morning or a trip to the pub. Track these types of purchases by carrying a notebook with you for a month and writing down every purchase you make in order to get the full picture.
- Separate funds—Many people struggle to reserve portions of their finances for specific purposes without dipping into them. Consider using an app or a separate bank account to keep yourself from being frivolous with money that is meant for other things.
- Check bills—You may think that you know what your electric or water bill is, but, if you’ve been working remotely, it is possible that such expenses have increased.
It is also important to repeat this process and reassess your budget regularly, or whenever a major change, such as employment status, occurs.
This article is intended for informational purposes only and is not intended to be exhaustive, nor should any discussion or opinions be construed as professional advice. Content by Zywave, Inc. provided by TH March.