Money-Living on a tight budget-How to get the most out of your money

Let's face it having to count the pennies and limit your spending is a pain in the backside. However if you have a limited income that is what you must do, if you want to keep your head above water. There are many these days who just think "what the hell" and accrue massive debts on credit cards and the like. However, even if you think that you can cope with bad debts and possibly bankruptcy, this is never a good idea. You can end up with a bad credit report or credit rating which could follow you around for years. Remember also that times change. Think back to centuries ago when debtors were thrown into prison. Now I am not saying such antics are possible these days but as the current economic downturn and fall of many established banks has shown nothing is definite or secure.With all of this in mind it is surely better to try and love within your means and avoid such disasters. If nothing else you will save yourself the damaging effects of stress and worry.

Being complacent about debt could lead you into all sorts of problems. You could be blacklisted and it could be years before your good name is restored. I guess it is my age why I am concerned about my good name. However your reputation is not something to be tossed away lightly.Never being able to take out a mortgage or borrow money again may be a distinct possibility.

If you have debts that were once affordable but now that you have had a recent reduction are out of your league, it can be very worrying. However if you contact the Citizen's Advice Bureau they will be able to help.With their help you should be able to suspend hefty interest charges or even have them written off. They will help you work out a plan of action and may turn things around for you in no time at all. Over all you need to remember not to worry and get stressed as both these can only have a negative impact.

Firstly let me say that I have used the images of poverty just to make sure that we all realise most of us never live in true poverty. Times get tough but these days such poverty is not so devastating in western countries. That is not to say that it could not be.

However as many of us need to be able to stretch our money in order to pay all the bills budgeting is essential.

ASSESSING THE SITUATION

The minimum wage is a godsend for many workers but it is not easy to live on.

Unless you know exactly what money you have coming in and what you have going out, how can you possibly assess the situation accurately? Let's try and make some initial steps that will help you live on a tight budget.

1. Sit down as a family, couple or household.
2. Write down ALL money you have coming into your household on a weekly or monthly basis. Weekly may be easier if money is in short supply.Only include definite amounts of cash.Write down all of your outgoings, on a weekly or monthly basis, as above. Include all itemised amounts of money such as rent, mortgage, insurances, debts, fuel bills, taxes and the like.
3. Now write down all of the other expenses which are not so easy to define. These may be travel costs, clothing, medical bills, school trips and really anything that happens only occasionally or does not cost a fixed amount of money.
4. Assess your food bills.
5. Try to make sure that you set realistic amounts of money for food bills and those occasional costs. It is better to overestimate than underestimate and be left short.
6. Now think about additional money you may receive such as cash-back on the Internet or money for writing reviews or taking surveys. You cannot rely on this money. It is worth showing it but not by including it into your accounts.
7. If you have financial software such as Money, use it. Once this is set up it will be easier to work out your finances and keep track of what the state of play is. Bear in mind though that such software is becoming a thing of the past. With banks offering the means to manage your accounts online new financial software suites may become antiquated all too soon.
8. Still, if all else fails, you cannot go too far wrong using your head, and a pen and paper to balance your household expenses.

So you now know just what money you are trying to live on. What you need to do now is make sure that you are getting value for money. If you have been made redundant, had your working hours reduced or simply become unemployed you will need to adjust to your new lower income. Even if you always live on a tight budget it can be hard and soul destroying at times. Try this action plan:-

• Take a tour around your home
• Look at each room and see what savings can be made.
• In the bathroom, for example, turn the temperature down on the water heater just a jot.
• Replace all light bulbs with the energy saving kind. Make sure though that you leave enough light on places such as stairwells which can be dangerous if poorly lit.
• Look at all the appliances in your home that have Stand By settings. Do you really need these to be left on? Turn these appliances off at the plug each night and you will be amazed how much money you save.
• Turn central heating thermostats down a little and use the timer.
• When it is time to replace old washing machines, dishwashers and the like ensure that you buy the most Eco-friendly version available. This will help the planet but will save you money in the long run.
• Consider if you can reduce how often you use some appliances. For example vacuum a little less often. Only use you automatic washing machine when you have a full load. Use any time saving cycles available. Wash at a cooler temperature water setting. Wait until the dishwasher is full before running a cycle or better still wash the dishes by hand.
• Just turning appliances down a little, using the saving cycles or using such appliances less often can save you plenty of much needed cash.
• Think about changing things such as that electric alarm clock. Do you really need it? Wouldn't an old fashioned, cheap, wind up alarm clock suffice?.

Now you are getting it, aren't you?. Yes .these tips will not make you rich overnight but they may help you survive until better days arrive. You may find though that they become a way of life as, many of these tips have the added bonus of helping the environment. So a few more tips:-

1. Look at your grocery shopping and assess if you are wasting money.
2. Try to bulk buy when possible as it works out cheaper. Check the use by dates though, just in case.
3. Limit, or do not buy, expensive ready meals.
4. Try a supermarket's own brand range of goods. These are usually much cheaper but just as good as well brand names.
5. Dig out an old recipe book or search online for good wholesome, tasty recipes that are good value.
6. Cook plenty of Pasta and Rice dishes to add variety and taste on the cheap.
7. Check out the bargain bins in your local supermarkets. As long as the food is in date and not contaminated it should be a bargain.
8. Do not throw food away unless you have to. Over ripe apples can be made into an apple crumble for example.
9. If you have to throw old food away see if it is suitable for going into your compost bin or onto your compost heap.
10. Pets can often eat more cheaply simply by swapping the brand of pet food

Remember that old adage about "Make do and Mend"? Try thinking along those lines.

• Never simply throw something away without considering if it has another use or still some wear in it.
• Perhaps your used goods could be sold on EBay, at a car boot, or a garage, sale.
• If something like a shirt is only fit for the rag bag use the material as dusters or rags, after you have cut off any buttons and safely stored them away for future use.

Try to maintain some sort of contingency fund.

1. Saving may seem impossible but try to put aside what you can.
2. If you complete any part time work such as mystery shopping or writing reviews try to set this extra money aside for emergencies. Remember though that you may need to pay tax on such earnings or at least declare them.
3. Try saving lose change in a family jar. You can then either swap these at a coin change in the supermarket, or even bank the money. You will be amazed just how such small change adds up.

It is still very true, even today, that necessity is the mother of invention. Use your hard times by being inventive and get the most out of your dosh, cash, money or whatever you call it. A few final tips:-

• Avoid using the car unless you have to.
• Maybe now would be a good time to become car free. After all even if you hardly ever use it you will have to pay road tax, insurance and the like.
• Trying walking more often, taking the bus or car sharing with colleagues, friends and neighbours. Be careful not to compromise your safety.
• Still smoke cigarettes? Now is the perfect time to stop this expensive habit and give your health a boost.
• Take a good value packed lunch to work or school.
• Cut down on expensive mobile or cell phones and mobile phone calls.
• Change you shopping habits and look for good value, cheap shops rather than those that offer brand names.
• Consider if it would be worth you swapping your utility, mortgage, or insurance provider. There are good deals to be had and many offer cash incentives for you to swap.
• Claim any benefits that you are entitled to. These are designed for just such economic times. In England there are Council Tax and Housing benefits available even if you are working. As a means tested benefit it all depends what you earn
• Be honest with any claims you make or you could end up in a worse position.
• Keep ONE credit card for emergencies and destroy the rest.Keep this card for emergencies only. As such it need to be well hidden in your home and not sitting in your purse or wallet.
• Join Internet Cash back sites and use them when you are making suitable purchases. If for example you have to replace your washing machine a cash back site should enable you to find a bargain and receive some cash back into the bargain.
• Keep receipts and make sure that you balance your cheque book and switch card regularly. This way there will be no unexpected nasty surprises.
• Spend consciously. Many people drift around almost in a daze spending here, there and everywhere, with little thought.
• Avoid the sales unless you need something in particular. If you buy something that you did not really need or want it is not really a bargain.
• Avoid unecessary debt at all costs.

Working options

• You may need to take into account benefit changes and child care costs if you start part time work. Make sure that the work is appropriate for you.
• Consider Temporary work until the economy improves
• Think about the benefits of re-training.
• Perhaps even look at going back to school or college in order to improve your qualifications.
• Now could be the best time to undertake full training for a new career. If you are unemployed you may get financial help to do so.

Remember when you are living on a tight budget nit to compromise your heath, safety or well being this means eating properly , having enough heat, receiving medical attention when needed and the like.

I have been married for almost 37 years. In that time we have certainly had our ups and downs financially. We have never been rich but we have seen both better and worse days. Yes we did see unemployment in the 1970s and more recently and we also experienced England's three day working week in the 1970s.

On the whole it has not been easy. However do not get me wrong. Although we did not travel abroad until we were in our thirties we have travelled a fair bit, own our home and can now afford the luxury of choosing to work part-time, both of us. Sure we have never owned a car but that has meant that we have been able to afford many other luxury toys. It all boils down to choices.

I learned that some of the old adages are as true as ever. You need to "cut your cloth according to your means" for example. Yes, we would all like to live the high life but I for one am not prepared to pay a high price for the privilege.

Be honest, try to keep within your budget and strive to improve your situation. With time your circumstances will change. Make sure that you still find some fun whilst you are struggling. The occasional treat should be included in any budget.

Prioritise your debts and always pay:-

• RENT OR MORTGAGE
• TAXES
• COUNCIL TAX IN ENGLAND

IF YOU DO NOT PAY THE ABOVE PROMPLTY YOU COULD END UP WITHOUT A ROOF OVER YOUR HEAD OR IN PRISON.