The latest figures from the Consumer Council show that the average cost of 500L of home heating oil is now at £479.73*.
Drivers across Northern Ireland are also being hit by significant increases in petrol and diesel prices, with experts predicting a cost of £2.50 to £3 for a litre in the near future. And food prices have also risen, with more people in the UK struggling to afford to eat every day, according to recent research by charity the Food Foundation.
It can be easy to feel overwhelmed when faced with this level of added cost to everyday life.
So, to help deal with some of this financial pressure, here are a few tips on budgeting and saving money that we hope will help you to make the most of your money.
*this figure changes each week. Price correct at 19 May 2022.
Prioritise expenses and goals
The first important step to budgeting is understanding how much income you have and where your money is being spent. Having an accurate picture of your finances will let you see where you might be able to cut costs. Sometimes we can buy items that aren’t necessities or impulse buy when our pay cheque comes through at the end of the month. All of this is ok, so long as you plan your spending for the month ahead.
One way to do this is by using the 50/30/20 budget method – put away 50% of your income towards needs such as food and transportation, 30% toward wants like clothes, and 20% toward savings. If that sounds too structured, it is also a good idea to set aside a little bit of cash every month to cover any miscellaneous expenses or wants.
Our Spending Overview* can also help to prioritise your bills. It provides a visual overview of what you spend your money on and gives you detailed information on how your spending and income is allocated. It divides your costs into different categories like Recreation and Leisure, Clothing, Household goods, Transport and Insurance automatically, and you can re-categorise any that aren’t quite right. Seeing these categories visually can help you to get a good understanding of where your money is going each month and what you could cut back on.
*this functionality is available through our eBanking and Mobile Bank app – you will have to be a registered eBanking user to use our app and Spending Overview. Find out more about eBanking and registering here.
Keep an eye on automatic transfers
Often when you sign up to a new subscription service like Netflix or Audible, they take an automatic payment once a month. These costs tend to add up without you realising and all of a sudden you’re losing £50 a month on services which you might not even use. As well as that, subscription costs can go up and we forget to change them when they do.
Keep an eye on any payments you automate, as you may discover monthly subscriptions that you’re paying for are no longer valuable to you. For example, if you have Netflix, Disney Plus, Amazon Prime and NowTV, why not reassess and see which one you use most and unsubscribe from the others? Although £6 a month can seem manageable, if you’re subscribed to 10 different platforms, the costs can rack up by the end of the year.
Revisit your budget monthly
Some expenses vary from month to month, checking in on your budget at least once, a month gives you the chance to deal with fluctuations in a timely manner. There’s also expenses that pop up infrequently, like holidays, gifts, or car insurance. Alongside your monthly check in, you could have an annual budget, where you pop in dates or occasions where you know you might need more money than usual in advance to help you plan.
Our budget calculator lets you get a better summary of your finances to help you see where your money is going and what you have left to save at the end of each month. All you have to do is fill out your monthly wage and expenses then the calculator will help you see what you have left. It’s a helpful way to stay on track of your monthly budget.
Pay annually rather than monthly if you can
If you are in a position to do so, it’s a good idea to pay off larger expenses, like rates Car Insurance, in one go. Paying annually might mean a bigger initial payment, but it actually works out cheaper in the end. That’s because, by paying a lump sum upfront, you avoid entering into a credit agreement that involves paying interest.
Set up a savings account
Another way to save money is by setting up a savings account. We have a wide range of savings accounts, you can find out more here.
Savings accounts allow you to keep some money separate to your regular day-to-day account, making it that bit harder to access. You could set aside money each month to put in your savings, set up a regular payment that goes automatically from your account or move over whatever you have left at the end of the month.
Don’t be afraid to trim back on some spending
Once you have completed your monthly budget, you can do a detailed analysis on where your spending goes. You’ll be able to differentiate between your needs and your wants, and prioritise as you need to. You might even find some regular payments that you might not be using any more, but you’re still paying for (we’re thinking of that gym membership you forgot to cancel before moving to another!) It can also help you identify if some of your spending or bills seem more expensive – make sure you shop around for the best deal before buying or committing to anything.
Apart from the regular payments, you might be surprised how much your daily hot drink can add up to over the month. If you’re shocked, you can look at cutting back a bit and saving a bit on different spending habits that add up.
Keep connected to us
Most importantly, don’t ever be afraid to talk to us if you are finding things challenging with your finances, now or at any time.
If you are a Danske customer and you are having money worries, you can find information about how to address the situation with us here. Please get in touch, we want to hear from you and we want to help.
It’s a challenging time for all of us and we would really urge anyone who is having money worries to talk to someone about it – that’s the first step to getting on top of the situation.