Managing Your Money

Managing Your Money

Individuals and families are feeling the impact of national austerity measures and as a result the amount of income left after paying for essential items is decreasing.

2015 is yet another year that is delivering families and individuals some tough financial challenges. There are of course other factors that can contribute to financial difficulties such as illness, relationship breakdown an unexpected expense such as a fire, death, robbery etc. However, this financial year need not mean unnecessary stress and debt. What ever your circumstances are we hope that by encouraging you to look at your finances honestly it will help you highlight where your money is going and start you on the first steps of budgeting and managing your money more effectively.

We need to change our view of and relationship with money. Budgeting is the key. While most of us find budgeting boring it is absolutely essential - a budget is a plan of money you expect to receive and how you expect to spend it.

A budget is important because it will show you:

  • How much money is coming into your household.
  • How much money is going out.
  • How much you can afford to offer to those you owe money to.
  • How you can best plan your spending in the future.

 

The Ballincollig Credit Union Limited Top Golden Tips for Managing Your Money in 2015 are:

Track
Keep track of your spending. Keep your receipts or take note of what you spend your money on. It will help you understand where your money is going and it might just be an eye opener.

Budget
Estimate your income and expenditure for a set period and budget accordingly. But be realistic and don't underestimate!

Save
Get into the habit of saving. Try to save at least 5% of your regular income for emergencies.

Be Prudent
Shop around and get the best deals and look at cost comparison websites.

Borrowing
There are times in our lives when we run short of funds. If you have to take out a loan, be sure you only borrow what you can comfortably afford to repay. You should match the repayment term to the purpose of the loan i.e. don't make the mistake of paying off Christmas over a number of years. Best advice is to stay away from credit cards and not to use Money-Lenders.

Budgeting Tools
You can download a budgeting guide to print off and use - please see below!
Ballincollig Credit Union Limited Budgeting Guide

Successful budgeting requires that you take the time to examine your finances and determine your income and outgoings.

We all have times when our money runs out before the month does. It does not matter how much you earn; it is to the benefit of each of us to create a workable budget. A budget that is workable is one that you can stick to.

Therefore, it is very important to be realistic both when assessing your income and expenditure and also when setting your financial goals.

In these difficult times, working out a budget is even more important to help you make ends meet, cope with any emergencies and plan for the future.

Here are some tips to help you along the way:

Before planning your budget, it is important to see what it is that you are spending your money on. You can start a budget by simply writing down what you spend on a daily basis.

Ideally you should do this over the period of a month. Remember, your budget is your personal tool and you can choose how much detail you want to include.

To help you in this exercise we have included a simple spending diary that you can fill in or print out.

When starting out, you may find it helpful to put your spending into categories, such as household, rather than keeping tabs onto individual expenses such as cat food, shampoo etc.

Some people might find it helpful to work with two groups of expenses:

  • Essentials- bills you must pay to keep your household and family running, such as utilities (Gas, Electricity), Housing, Groceries, etc.
  • Non-Essentials- entertainment, holidays, gifts, etc.

 

There are no rigid rules to creating a budget, the important thing is make it flexible and realistic. Remember Rome wasn’t built in a day, you are free to amend it as you go along to suit your circumstances. Best of luck.

Individuals and families are feeling the impact of national austerity measures and as a result the amount of income left after paying for essential items is decreasing.

2015 is yet another year that is delivering families and individuals some tough financial challenges. There are of course other factors that can contribute to financial difficulties such as illness, relationship breakdown an unexpected expense such as a fire, death, robbery etc.

However, this financial year need not mean unnecessary stress and debt. Whatever your circumstances are we hope that by encouraging you to look at your finances honestly it will help you highlight where your money is going and start you on the first steps of budgeting and managing your money more effectively.

Putting a budget together can seem like an exhausting exercise at first, Where do I start?, What items will I include?

As stated already, the key to an effective budget is that you make it flexible and are realistic in terms of the financial goals that you set yourself. There is no point on setting unreasonable objectives for yourself and becoming disheartened later on when you fail to achieve those objectives.

The first objective of any budget is that we should be able to meet the basic and expected expenses that occur in our lives, i.e. food, shelter, heat, etc and also find an effective way of setting aside money to cover regular bills such as gas and electricity and less regular or annual bills such as car insurance. Too often, we are caught at the end of the month with a number of bills arriving together and no provision made. A simple and effective Budget aims to cover this expense before the pile-up begins and headaches start.

Here we provide some steps for getting that budget going.

You can also access a Budget Plan that will allow you to enter your details and will do the calculations for you. Why not try this over the the period of a month. You can use this both for estimating income and expenditure and also recording actual income and expenditure. Click to download.

  1. Pick a time frame i.e. Weekly or Monthly
  2. Calculate your income the first part of our Budget Plan will help you do this.
  3. Calculate your expenses the second part of our Budget Plan will help you do this. The plan includes categories to guide you and has “other” spaces should you wish to add more expenses.
  4. Work out the difference Our Budget Plan will automatically calculate this for you.
  5. Fine tune and plan Is this the result that you were expecting? Does your budget show that you are spending more than you earn? Now is the time to revisit your spending.
  6. Keep it up-to-date Keep track of your expenses and adjust your budget if you have to. Be flexible. You may be hit with the occasional unexpected bill or even receive a pay rise!

It is inevitable that you will encounter unexpected expenses. At some time in all of our lives things and events will crop up that we just didn’t see coming, whether it be something small such as a window breaking or something much larger such as a car accident or the passing of a loved one.

Some people worry that an unexpected bill will derail their budget. The best way to prevent this is to plan for it. We can not plan for the particular event, however we can all be assured that these events will happen and make provision now for when the time arrives.

Try to save enough to give yourself a small buffer you can use in emergencies. It need not be anything too great if you cannot afford it. You would be surprised how quickly saving even €5 or €10 put away per week can built up if we do it consistently and stick with it.

Plant the acorns and watch them grow into a mighty oak.

What if I blow my budget?

Don’t lose heart, examine where you went wrong and try again.

If you have severely blown your budget, find yourself in financial turmoil, and can’t repay your debts the first thing to do is to remain calm.

It is important to contact the companies that you owe money to promptly and tell them you are having financial difficulties and want to discuss payment arrangements. This is particularly important if you’ve used your home, or other assets to secure the loan.

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