What Should I Prioritise When Spending Money?

If we want to be more careful with our money then it is important to make sure that we are really careful when we are spending money. We want to make sure that we are spending money on important things and not wasting it on things that we do not need. It is not always easy to identify the difference between these at times though, especially if this is not something that we have done before. Therefore, there are a few things that we can do which will help with this.

Do I need it?

The first question that you should be asking yourself is whether you need the item that you are buying. We often buy a lot of things without really thinking about them and it is a good idea to actually think about whether it is something we need. We buy a lot of things that we do not need. Our needs are things we need to survive, so this would include shelter (so rent or mortgage), tax loan repayments and contractual payments (to avoid prison), food (to avoid starvation) and transport, clothing and toiletries (so we can go to work to pay for what we need). Many things we buy, we do not really need and if we are trying to budget then it is these that we need to cut back on.

Do I already have one?

It is also a good idea to ask yourself whether you already have one of the items that you are buying. You may need to check as you may have forgotten or you may be buying it as a fun extra thing to have. Consider whether it is really right to be buying another one when you already have one. It might be that you can go without and that will help you to be able to spend less money.

What are the consequences of not spending?

It is also worth thinking about what the consequences will be of not spending that money. You need to look at two things. Think about how you will cope without this good or service, is there an alternative that you have already or will you cope well without it. You also need to think about the cost of the item and what alternative items you will be able to buy with that money. Then you can decide whether you think it is right to spend that money.

Do I have the Money?

It is also well worth making sure that you have the money to be able to pay for the item anyway. It is wise to keep a constant check on your bank balance so you are aware of how much money is in there. You should also think about what else you will need to buy before you next get paid. This will enable you to check if there is enough to spend. You do not want to accidently go overdrawn due to spending money without thinking, so this is a really important stage in the process.

It might seem like a lot of questions to ask, but once you are in the habit of thinking this way it gets much easier. In fact, once you do it for long enough it just becomes a habit that you will easily be able to stick to. It will get really easy to do and it will be a really good idea to continue to always do it so that you can always check that your spending is necessary. It might seem a bit of a drag and no fun, but it does not mean that you cannot buy any treats, the idea is just that you are well in control of your spending and when you do buy a treat you know that it is within your budget.

How do I Stick to an Entertainment Budget?

It is great fun to go out with our friends and family, see a play, have a meal and drink, go to a show or club, buy music, films and books. It can be easy to spend a lot of money on these things because they are lots of fun. This means that if you want to reduce how much you spend in this area, it can be difficult. So even if you set a budget it can be tricky to stick exactly to it. There are some things that you can do that might help.

Find free entertainment

There are ways to find free entertainment and it can be worth looking out for these. You can borrow books and ebooks from libraries these days and so you do not even have to go out in order to get books. You can also listen to music on the radio so that you can listen for free. If you want to watch films or television shows, there are lots of free ones that you can look at on YouTube and other similar sites. There are free games that you can play online as well, so there are plenty of things that you can do. Most will need a computer or mobile device but as most of us have these anyway it will not cost extra money.

Reduce how often you go out

It is often going out that costs the most money. This is because it is expensive to buy food and drink as well as pay for clubs, shows, films etc. If you go out less often, then you will not spend so much money. Therefore, if you restrict how often you go out this could help. This may not be a very attractive prospect but it will mean that you are limited in hoe much you will be able to spend as you will not be out so often. If you are struggling to stick to your entertainment budget still going out a lot, then it could be the only way that you will be able to make sure that you just cannot spend too much money.

Only take cash out with you

Many people are not keen on carrying cash, but if you only have cash with you, then once it is spent you will not be able to spend any more. This means that you will have a physical barrier to spending more money as there will simply be no more available to spend. This can help but you will need to make sure that you spend your money wisely and leave money for a taxi home and things like this.

It is also worth remembering that having less money does not need to mean that you have to have less fun. There are lots of fun things to do that are free such as just enjoying the company of your friends and family or going out for a walk. It might sound less fun, but if you go out somewhere quiet it can give you the opportunity for a nice long chat and to rediscover each other when you may have not really been able to do that when you were listening to music, watching a film etc You may also start to really appreciate the times that you go out if you are going out less often.

It can also be helpful if the people that you normally go out with know that you are restricting your budget too. They may support you and help you to spend less by reminding you that you are trying to cut down. They might be happy to also cut down so that they can help their own financial situation as well.

How do I Pay for a New Computer?

Many of us own computers and get quite reliant on them, whether for work, study or entertainment. This means that if one breaks down, then we will want to replace it. This can be costly and so we need to be sure that we can find a way to pay for it. There are various options that we can consider.

Use savings

If we have some savings then it can be great to use these to pay for the computer. By using these we will be able to buy it quickly and we will not have to pay any extra. However, we will lose out in interest if we use the money, as we will be getting interest on the savings. But, if we borrow the money, the cost of that loan is likely to be very much higher than the lost interest. It is worth checking though, but in most cases this will be true. There are also other advantages of not borrowing, such as the fact that there will be no pressure to make loan repayments each month, although you might want to make some regular monthly payments to top your savings account back up. You might want to do this as much as you can as it is nice to have savings, but of course, you can always draw money out of the savings if you really need it.

Saving up can be a great way to get the funds you need.

Save up

If you can wait to buy the computer, then it might be a good idea to save up for it. This can be especially useful if you do not have any savings or do not have enough. This is not always easy though, especially if you are not used to saving or do not usually have enough money to save. Therefore, it can be wise to make sure that you stay motivated. Setting up a direct debit so the money is paid directly into your bank is a good start and then making sure that you do not spend too much money. You might need to think of some ways to earn extra money as well, so that you know that you will be able to save up for it quickly.

Take out a loan

If you do not have any savings and you want or need the computer quickly then a loan could be a good idea. It will mean that you will have to pay interest and perhaps other costs, so that will add on to the cost of the computer. You therefore need to be aware of how much these will be and decide whether you are happy to pay that much extra. You also need to make sure that you know exactly how much you will be expected to repay and when. This will enable you to work out whether you will have enough money to be able to afford to make these repayments.

It might not feel like it should be a big decision, but whenever we buy something, particularly if it is expensive. We should be thinking about how we are going to pay for it and whether we can afford it. It is a good idea to make sure that you will be able to repay any £100 loans we take and that we are also aware of the cost of any loans and feel that it is worth paying that extra money. Every time we buy something we should be asking ourselves whether we think that it is worth the money and whether we really need it. This will enable us to make sure that we do not spend more than can afford and will not buy more than we really need or want.

Can I Reduce my Loan Charges?

If you have loans, then you will be paying charges for them. It could be that you will be paying interest on them and there might be fees as well or instead. This means that you will need to think about whether there is any way that you can reduce these costs. There are a few things that you could try out.

Switch to a cheaper lender

It is worth hunting around to see whether you can switch to a cheaper lender. It might be possible for you to take out another loan, use that to pay off what you owe and then you will have to repay the alternative lender. You will need to check this out carefully though. Firstly, you might find that you have a fee to pay if you pay off the loan early. This is called an early redemption fee. Some lenders will have on and some will not. Some will be a small amount and so will be very large. It is well worth checking with your lender as to whether there is such a fee so that you can decide if it is worth repaying it early. It is wise to calculate how much you will be paying in interest if you keep the loan and how much the fee is. If the fee is more than the total interest you are paying it is best to keep the loan and repay it as agreed. However, if the fee is less, you will need to calculate how much the alternative loan you are thinking of switching to will cost and then work out whether it will be cheaper to switch. This sounds complicated but it is not, just ask each lender how much the loan will cost and ask your current lender which the early redemption fee, they will do all the hard work and you will just need to compare the figures.

Repay some of what you owe

If there is no early redemption fee or it is very small, then it is worth repaying some of the loan early. If you can put, even just a small extra amount, against the loan each month it will get the costs down. As you repay more and more, you will be charged less and less interest so the loan will be costing you less money. As you repay more and more, the interest will keep reducing and this will enable you to be able to repay more of the balance with the money that you would have been using to pay the interest.

Choose a lender wisely

If you are choosing a new lender then you should be careful to carefully compare the rates of various lenders so that you choose the cheapest one. This will keep your loan costs down. However, it is good to also see whether it is a flexible loan where you can make overpayments. This will be in your advantage as you will be able to repay the loan early and make it cheaper. So, check this before taking out the loan and this should help. If the loan is one that can be repayments with no fee or a very small one, then make sure, that during the course of the loan, you keep comparing the costs to make sure that there is not a cheaper one that you can switch to. It is a good idea to do this every six months to a year so that you can be completely sure that you are neve paying more than completely necessary. Do make sure that there are no fees for taking out a loan as well as repaying on early as these costs could make it more expensive to swap lenders than stay with your current one.

Is it Good to Live With my Parents to Save Money?

When we are young we live with our parents and do not need to pay any money towards the things that they give us. We do not pay for food, towards the bills or any rent. As we get older, we might think about moving out but it is expensive. It might be worth thinking about staying with parents so that you can save money on these sorts of things or moving back in if you feel that you would like to save money. There are things you need to consider though.

They might charge you

Some parents might charge older children for staying with them. They might want some help towards paying the bills, buying food and other things. This could be because they retire and do not have so much money or that they feel you should be contributing if you are staying at home. Chances are that it will be cheaper than renting or buying a place of your own.

You might want independence

It is worth thinking about whether you want to be independent of your parents. As nice as it is living with family, you might get to the point where you want to be independent. Not only will this mean that you will be more in control of where you go and what you do but you will be able to makes decisions about the property that you live in such as which one to live in, how to decorate and furnish it and any renovation work that might need doing.

You do not get on the housing ladder

It might be worth considering that if you do not buy your own home, then you will never get on the housing ladder. For some people this is not a concern and they will be happy with not worried about this. However, some would rather think about putting some money into a home. Staying with parents could be a good opportunity to save up a deposit for a house, as it is likely you will pay less out in rent and will have the chance to save more money.

They might want time alone

It is worth considering that your parents might want some time on their own. They might want to get to know each other again without their children under their feet. Also, if you have children, they might find it hard to cope with small grandchildren around the place all of the time as it could be really tiring.

They might need care

One advantage of staying with them is that you will be able to help if they need care. As parents get older there is a chance that they will need some sort of help. They may have an illness and need care but it may be more that they are less mobile so they need help with chores in the house and garden. This could mean that living with them could be a good help to them and it could mean that you will not worry about them so much and whether they are managing.

There is a lot to think about when you are deciding this. If you still live at home it will be easier, but if you are thinking of moving back in with your parents then this can be trickier. They may have been used to being without you and it could be tricky going back. You may not get on as well as you used to and you might have new habits now that you have been away. So, discuss it with carefully before making up your mind.