Living on a low income in the UK can be a challenge, especially if you’re trying to save for a house or like most of us, just trying to make ends meet. Budgeting can be key to ensuring your finances are managed properly, but it can be hard to know where to start. Here are some helpful tips on how you can budget and save on a low income.
Track and Monitor Your Income
The first step is to be aware of how much money you are bringing in. This includes any income both you and your partner have and any benefits you receive. Keeping track of your income will help you identify where your money is going and help you to identify any areas where you could be saving more.
Track Your Spending
The next step is to track your spending and identify where your money is going. One way to do this is to keep a weekly and monthly budget and record your spending in each category. Knowing where your money is going is key to helping you understand where you could be cutting back on your expenditure.
Make a Financial Plan
Once you’ve got a grasp on your income and spending, it’s time to make a financial plan. This should include a budget for each month, as well as any long-term savings goals. It’s important to set realistic goals and to be realistic about how much you can save each month.
Having a financial plan is crucial to help you reach your goals, but it’s also important to review it regularly to make sure you’re still on track.
Set up a Savings Account
Having a savings account is a great way to save on a low income. If you’re able to put away even a small amount each month, it can add up over time. There are lots of different kinds of savings accounts available, so it’s worth shopping around for one that best meets your needs.
Setting up an automatic transfer each month from your current account to your savings account can also help you save without having to think about it.
Look for Deals and Discounts
Scouring for deals and discounts can be an effective way to save on a low income. There are lots of resources available to help you find the best price on the things you need. Websites such as MoneySavingExpert and HotUKDeals offer great advice on where to find bargains on a range of products and services.
Don’t be afraid to ask for a discount either; if you’re a frequent customer, businesses might be willing to offer you a better deal than their standard pricing.
Claim What You’re Entitled To
There are lots of benefits and entitlements available to those on a low income. Things like housing benefit, child benefit or working tax credit can make a big difference to your finances. Do your research and make sure you’re claiming everything you’re entitled to.
Be Mindful of Your Future
Finally, it’s important not to forget about the future. While it’s not always fun to think about the future, it’s important to be aware of potential risks such as inflation or illness. It’s worth thinking about putting a little bit away each month in a ‘rainy-day’ fund, or having a pension in preparation for retirement.
Living on a low income in the UK can be difficult, but with the right strategies and a bit of planning, it is possible to budget and save effectively. Keep track of your income and spending, make a financial plan, set up a savings account, scour the market for deals and discounts, and don’t forget to claim what you’re entitled to. Lastly, remember to be mindful of your future by setting some money aside in a ‘rainy-day’ fund or a pension. Following these tips will put you well on your way to budgeting and saving on a low income.