Budgeting

As retirement approaches, many people can have conflicting feelings. The opportunity to stop working and spend more time doing the things you enjoy and seeing more of the people you love is an exciting prospect. However, having worked for, perhaps, 40 or 50 years, the prospect of such a dramatic change can be deeply unsettling.

At the beginning of the year many people take the opportunity to make changes. Some decide to adopt a healthier lifestyle; losing weight, stopping smoking, or reducing the amount of meat they eat. Others see the start of a new year as the motivation they need to look for a new job, start a new hobby or even move house.

When something you rely on breaks, such as your central heating or car, having money put aside to pay for it to be repaired or replaced, makes life a little less stressful. Similarly, if you fall ill, or you lose your job, having enough money put aside to pay your essential bills will give you breathing space to recover or find a new job. That is why building an “emergency fund”, savings which are there to help you deal with the unexpected things life sometimes throws at you, is something everyone should do.

A few weeks into the month, do you find yourself wondering where your wages have gone? If the answer is yes, you probably need a budget.

Creating a budget might seem a bit scary if you’ve never done one before, but it’s not.  A budget essentially helps you see how much money you have coming in each month and where that money goes. Creating and sticking to a budget means you are much more likely to:

Be in control of your money

Are you in the situation where you’re spending more than you earn? Are you finding yourself increasingly dependent on credit cards or an overdraft to get by each month? If so, it’s time to work out where you can cut back to get your finances under control.

If you haven’t done so already you should think about creating a budget and you can find out more about the budgeting basics here .

Follow these ten top tips to help you to reduce monthly costs and feel happier about your money:

Second part of Reducing the cost of debt post.
 

Tip 5: Re-mortgaging to pay off debt

Secured debt, such as a mortgage, tends to offer the cheapest form of borrowing. You could consider borrowing more on your mortgage to pay off expensive unsecured debt such as credit cards, unsecured loans, and overdrafts.

Whilst most people will have some sort of debt to manage their finances, the aim with debt should always be to repay it as quickly as possible whilst paying the least amount of interest along the way.

Here are eight tips to help reduce the cost of your debt.