How to manage your money effectively

Managing your money can feel like a tough job, but having your finances in order is a great way to enable you to remain as independent as possible.

To help support you, we’ve rounded up some tips and resources from around the web.

Create a budget

Creating a budget might sound like a lot of work, but it’s a useful way to balance your monthly outgoings against the money you have coming in. The idea is to add up all the fixed expenses that come out of your bank account every month so you can understand how much disposable income you have.

A good place to start is to use the percentage-based budgeting rule – the ‘50-30-20’ – to keep on top of your finances. This dictates that you should split you monthly income into three areas:

50% on your needs (housing, bills, food)
30% on wants (hobbies, socialising, shopping)
20% on savings

Some people choose to create their own budgets on Excel or Google Sheets, or you can use a ready-made plan like Money Saving Expert’s Budget Planner Spreadsheet.

Alternatively, there are plenty of tools out there to help you if this sounds too complicated. IE Hub is a free online tool that makes managing your money easier by enabling you to create a personalised budget quickly and easily. You can also share your financial information with any companies you owe money to – such as utility companies – to help manage any debt and get a plan in place for future financial health. You can declare any disabilities or health issues with these companies too.

Find out more about IE Hub on its website.

Save for a rainy day

It’s not always possible to put money aside. However, after making your budget you may notice a few areas where you could cut back spending so you can set some money aside for the future. Having some money stashed away can help to put your mind at rest in case of any emergencies – or just for a rainy day!

Make sure you keep any savings in a dedicated savings account with a good interest rate. Usually, putting your money in a fixed-rate account will earn you extra interest, but this does mean that you can’t access your money as easily. Make sure you investigate how easy it will be to access your cash in an emergency before depositing it. Money Saving Expert has plenty of advice on this, and it breaks down the best rates and providers to help your money go further.

A good habit to get into is to transfer money into your savings account as soon as you get paid, even if it’s just a small amount. You can even set up a standing order to do it automatically – then you won’t be tempted to spend it!

Shop around

Whether it’s household bills, your home or car insurance, or your weekly supermarket shop, it’s worth looking around to find the cheapest provider for your needs.

Compare the Market or MoneySuperMarket are great websites to help you find the best price for whatever you’re looking for – and switching providers can sometimes even get you a bonus.

Check your eligibility for grants and benefits

Are you getting all the financial help you’re entitled to? Running a quick check can help to boost your monthly income and make life more comfortable.

GOV.UK has a wealth of information about all possible grants and benefits available. This can be to support you with housing or heating costs if you’re on a low income, offer additional financial help if you’re disabled or provide extra funds to help with the costs of being a carer.

IE Hub also has a built-in feature that enables you to easily and quickly check if you’re eligible for any benefits. Simply sign up for an account, fill in the relevant information and you may find out you’re eligible for some additional income.

Look for discounts

Everyone loves a discount! Email newsletters such as Money Saving Expert are great for highlighting the best savings and current loopholes available to help you cut costs. You can also sign up to Groupon and Wowcher’s newsletters to see if you can snag a bargain on any days out or gifts.

However, while it’s great to grab a shopping discount, it’s also worth looking at whether you can get a discount on your household bills. For instance, people living alone are entitled to a Council Tax single-person discount of 25%. Just search on GOV.UK to see if you’re eligible.

Keep an eye on your debts

Dealing with debt can be stressful, but the most effective way to manage your debt is to be fully aware of everything you owe – and not to bury your head in the sand.

If you can afford to, set up a standing order to pay off your debt each month. If you’re struggling to pay off your debts, it’s best to communicate this as soon as possible. In doing so, you could get a break from paying interest on your debts through a government scheme called ‘breathing space’. Find out more about this on the National Debtline website.

Seek help if needed

We all need help with our finances sometimes. If you feel you could use some support with your money to help you live more independently, there are charities and services out there to help.

Citizens Advice provides plenty of information on getting financial advice, and Age UK has plenty of money and finance resources. You can also read MoneyHelper’s guide to managing money or check out Mind’s tips for organising your finances.

Remember, there is plenty of help out there, so you don’t need to struggle alone.

Additional support at home

Alongside reablement, staying independent is about having peace of mind that you’re not going to be left cold or in the dark if the heating or electricity fails.

The Priority Services Register (PSR) is an important, free support service which is designed to support those who need a little extra help in the event of interruptions to their gas, water or electricity supply. If you or someone you know has extra communication, access or safety needs, signing up to the PSR will help ensure you or they can access the best possible services at all times, and feel safe and independent at home.