Month after month, you know how it is. Payday comes around and it seems like you’re walking on sunshine. You check your bank account, a healthy balance grins back at you, and, just for a moment, the world is yours. A night on the town; bottomless brunches; the new outfit you’ve been eyeing; you’ve got the funds for fun. But then, to your horror, your monthly bills rear their ugly heads and start to take brutal swipes out of your hard-earned money. Even worse, you may even find yourself struggling to make your cash go the distance to cover your monthly expenses.
You don’t need to be a Destiny’s Child fan to know that keeping on top of bills is part and parcel of adult life. However, with some handy tips and a few pearls of wisdom in personal finance, we’re going to show you how to take the hassle out of paying your bills …
Perhaps the most fundamental part of paying bills, stress-free, is effective budgeting. It sounds obvious, but you’d be surprised how many people fail to clearly plan out their monthly incomings and outgoings, leaving them with nasty surprises when they realise their money can’t cover their expenditures.
The bottom line is: budgeting is about prioritising. Find out which bills are absolutely essential to you and make those the undisputed priority each month. In some cases, it’s easy to identify them: your rent/mortgage, your food, your electricity. Unless you live in a cave, these should be non-negotiable. Therefore, you need to prioritise them over, say, a lunch out with friends, or a trip to the movies. So, tally up these costs and try to arrive at a specific figure. Knowing that X amount of money is going to come out of your account without fail each month, means you’ll also work out how much disposable income you’ve got left over for the fun stuff.
Disposable income discipline
On the flip side, sometimes your priority bills are less obvious, particularly when it comes to leisure-related spending. A monthly Netflix subscription, two brunches out, four yoga classes and a flat white on the way to work each morning are all well and good…if you can afford it. If not, we’re back to prioritising again. It may sound deathly boring, but you need to be disciplined enough to prioritise your disposable income in the same way as your ‘important stuff’ income. If you can’t live without a Netflix marathon on a Sunday night, prioritise that over your daily flat whites. Need Yoga classes for your mental wellbeing? Prioritise that over that new pair of shoes. Doing this allows you to financially cover what really matters to you, without eating into the money that was supposed to pay for council tax this month.
For more info, check this great guide to budgeting from Money Saving Expert, with a free budget calculator included.
2. Negotiating the ‘Non-Negotiable
Just because some expenditure is compulsory, it doesn’t mean you can’t diminish the cost. Making time to shop around for the best deal will save you so much in the long term. Plus, in the age of the Internet, there are literally thousands of great websites you can use to quickly compare different providers and tariffs. Here are some useful pointers to save money across three common ‘compulsory’ expenditures:
According to Which?, one of the best ways to save money on your energy is simply by keeping on top of your tariff. This is because when your contract expires you’ll automatically be switched to your provider’s standard rate, which is unlikely to be their cheapest, especially if you’ve bought from one of the better-known suppliers like EDF or British Gas. When your contract is coming to an end, spend some time shopping around to see who’s got the best deal going at that moment in time.
Sites such as Energy Helpline and Energy Linx are Ofgem-accredited and compare all major UK providers. Sometimes, a good energy deal can also involve a bit of gambling. Bear in mind that, even if a three-year tariff is more expensive at face value than a one-year, it could actually save you money if energy prices rise during that period. Likewise, you could end up overpaying if they drop, so it’s really about working out how much risk you’re willing to take.
It may seem counter intuitive, but overpaying on your mortgage can actually save you money in the long term. Not only is it a good way to reduce the overall debt you incurred in the mortgage, but you also won’t pay any interest on the amount you overpay*. According to Martin Lewis, from Money Saving Expert, this is beneficial for two reasons: by putting extra money towards your mortgage without paying interest, you pay off the debt quicker and, crucially, you might even end up with better overall returns than if you had deposited the money in a low-interest savings account.
After a hard day’s work, cooking up a nutritious, tasty – and dare we say it – Instagram-worthy meal from scratch can seem downright impossible. In the age of Deliveroo and UberEATS, it can be all too easy to rely on convenience-based hacks to get yourself through three square meals.
However, you’d better believe that convenience comes at a premium; ready meals and home delivery can quickly eat up – no pun intended - your weekly food budget, leaving you both hungry and out of pocket. Instead, why not try making your food work for you? Spend some time each week making a detailed meal plan; this will help you work out exactly what you need from the supermarket, meaning you don’t overspend on unnecessary ingredients or excessive quantities. Likewise, having a comprehensive list means you can plan your food economically, maximising fewer ingredients across a greater number of meals. If you’re into online shopping, My Supermarket is a great website for comparing prices across the UK’s major supermarkets, ensuring you can pick up the best deal, every time.
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*Check conditions of overpaying with your mortgage provider in relation to yearly payment caps