In a climate of rising living costs and ongoing financial uncertainty is it any surprise that we’re all feeling the pinch? Fidelity International’s research reveals that more than half (53%)1 of working women in the UK are stressed about meeting the cost of their immediate needs, especially when it comes to food, their mortgage or rent and energy bills.

While we can’t control the seemingly ever-increasing cost of everyday essentials, we can take some simple steps to take control of our personal finances. A simple budget can give us an overview of exactly what we have coming in and going out. And that can take away a lot of the underlying anxiety that we can feel when we don’t have our day-to-day finances under control.

It’s a simple task of putting our finances under the microscope and coming up with a budget that we know will meet our needs. And reassuringly, over a third (37%)1 of women are already taking control by doing just that – focusing on budgeting as their most pressing financial need. This underlines the power of budgeting as a way to ensure their and their family’s financial wellness remains robust, whatever life throws their way.

Budgeting is a core pillar of financial wellness, so here are some straightforward and practical tips and tools you can use to help you budget better.

Here are the golden rules of budgeting:

1. Get to grips with what you’ve got 

Be honest with yourself about how much you owe and where your money goes. Make a note of your take-home pay, after tax, national insurance and so on has been deducted, then offset that against your regular outgoings. Include rent/mortgage, council tax, utility bills, insurance premiums, phone/broadband bills, school fees and so on. Include variables such as food, drink, petrol, going out, holidays, Christmas and birthdays. Don’t forget credit card balances, personal loans or any other forms of loan or hire purchase agreement that you’ve got too.  

You will soon get a good idea of whether you’re spending within your means (i.e., you actually have some cash left after everything has been paid for) or you’re living way beyond your means. Fidelity’s budgeting tool can help get you started.

2. Set yourself a budget 

It’s all too easy to let money slip through your fingers. No sooner has your salary hit your current account than you find yourself counting down the days until pay day comes round again. 

But now that you know what your net income is, and when you will be paid each week or month, you can go about setting yourself an achievable budget. 

The first step is to factor in the cost of everything you have to pay for from rent/mortgage to household bills, food and travel costs to going out. Be realistic. It might be an eye-opener, but it’s good to know where your hard-earned money is going. And it also shows you how much you can afford to save.

3. Monitor your repayments and adjust when necessary 

Now that you’ve seen how much of your income goes on repaying debts you already have, see what you can do to clear them more quickly. If you can pay more, do so. 

If you’re earning less and overstretching yourself, then reduce it accordingly. But make sure you review this as soon as your earnings go back up, so you keep your repayment plan on track.

4. Prioritise your debts 

Try to sort your debts into order of priority. 

If you miss a mortgage payment your credit rating could be adversely affected, and non-payment of council tax could result in a court summons, unless you have come to some agreed arrangement with them in advance. 

Don’t be afraid to reach out for help. And remember, there is no need to pay for debt counselling, so beware of debt consolidation companies who will charge a fee to do the work that the charitable organisations offer for free. There are numerous free debt counselling and advisory services available that can help you. These are charities and organisations that will work with you to sort out your finances, prioritise your debts and even help you negotiate with your creditors.

5. Spend some time every once in a while, reviewing your finances 

Like your physical and mental health, it's important to regularly check your finances, so you can get the most from what you have now, while saving for the future. With our calculator, you can get your own financial wellness score for all four areas (budgeting, debt, savings, and protection), and see where you're doing well and the areas you can work on. All you have to do is answer a few simple questions about your finances and you'll find out how you are doing, so you can adapt your plans if needed.

Source

1 The Fidelity Global Sentiment Survey, 2023. The survey has been fielded to 26,000 working adults aged 20-75, across 23 international markets, including 1,000 in the UK (500 women) with a minimum household income of £10,000. The survey translation, data collection, research, and the subsequent data analysis were completed in partnership with Opinium, a third-party strategic insight agency, using their global research panel in conjunction with their partner vendors. Data collection took place in July 2023.

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