Posted: June 2nd, 2011 | Author: Joe | Filed under: Debt, Tips | Tags: Budgeting, debt management, Guest Post | No Comments »
According to a survey by insolvency trade body R3, over 80% of the British population have changed the way they spend their money over the last year.
More than half (51%) of the population aren’t buying as many non-essential items such as DVDs and clothes, while almost half (47%) said they are now shopping around before they buy something to make sure they get the best deal. Just over one fifth (22%) said they no longer purchase non-essentials from specialist retail chains – they buy them in the supermarket instead.
The findings of the research revealed that women are ‘leading the charge’ when it comes to cutting back on spending – with more women switching to ‘value’ or own-brand products (42%), compared with 32% of men.
Almost half (44%) of women have started using discount vouchers when they go shopping, with just 31% of men doing the same.
Meanwhile, nearly one quarter (23%) of women now set themselves a budget – whilst just 15% of men do the same.
Frances Coulson, President of R3, said: “It is encouraging to see that a considerable percentage of people are actively trying to lower their expenditure as this will help them to live within their means. However, it is a shame that budgeting remains quite low down on people’s agenda. Setting a budget enables you to clearly see how much you spend against your income. A budget is probably the most powerful financial weapon in the fight against debt and its value should not be underestimated.”
Budgeting – how it can help ‘fight’ against debt
After that comment about budgeting being a powerful weapon in ‘the fight against debt’, we’re going to take a brief look at how your budget could help you fight against debt.
Your monthly budget can allow you to see pretty much everything about your finances: where your money is coming from, where it is going – and more importantly, where you may be able to save money.
If, for example, you can see that you’re spending too much money on non-essentials, and can’t afford your debt repayments as a result of this… this can help you cut back and free up the money you need for your debts.
That’s one reason having a budget is so important in the fight against debt – because you can clearly see where you’re spending too much money and make the necessary changes yourself.
Sometimes, however, cutting back might not be enough… and your debts may start to grow and become unmanageable.
If you can’t afford your payments and it doesn’t look like cutting back will be enough for you, you may find that debt management is a suitable solution to your problem. This site explains debt management in more detail, but you could also speak to a professional debt adviser for some advice on what you could do to help your situation.
Debt management isn’t without its drawbacks – repaying your debt more slowly can cost you more in the long run, for example – but it could still be the best way for you to address your debts.
This has been a
guest post from the folks at Debt Advice Now, who provide advice and a wide range of solutions for people in debt. Visit
www.debtadvicenow.co.uk to find out more.
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Posted: September 22nd, 2009 | Author: Joe | Filed under: Saving, spending | Tags: Budgeting, Economy, Opinion, Wealthy | 1 Comment »
According to a recent NYT article:
“Someone with $100 million has nothing to fear, not even fear itself.
But not long ago, a client with such assets called and asked Bruce Bickel, her wealth adviser at PNC Wealth Management, to put her on a budget.”
Millionaires on budgets? What’s This world Coming to?
According to The Boston Consulting Group, worldwide wealth is not expected to return to 2007 levels until 2013 – and the number of millionaires is down 18%. All this has created a crisis in confidence for the wealthy. So much so that they are not only cutting back, but changing their behavior to make the cut backs a way of life.
I guess it’s a good thing, I just wish I had enough money to not know where it’s going and still make ends meet. But then again, my frugal nature would still make me watch my dollars and cents. 
But while budgeting is generally a good thing, in this case it could have a trickle down effect, and lead to a generally tepid economy:
“Caution, like thrift, can be detrimental to an economy in crisis. If wealthy investors steer clear of stocks for the medium term, the trading rally of the last few months could slow. If they are afraid to lock up their capital for the longer term, private equity partnerships and hedge funds could suffer. And if wealthier people eschew the heavy debt load they had recently embraced, their savings may increase but the banks that had eagerly lent to them will feel the effect. And this will then affect less-affluent investors.”
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Posted: April 4th, 2008 | Author: Joe | Filed under: Saving, Tips | Tags: Budgeting, money, Saving, spending, windfall | 3 Comments »
Reading Four Ways I Upgraded Out Of My Raises at Free From Broke, got me thinking about how our spending tends to grow into our income. I’ve known about that concept for a while now and have fought hard to resist it, but I’ve had a realization recently that makes this even easier. I’d like to share it with you, dear reader.
With all the talk about the economic stimulus payments that will be issued in the next few months, coupled with my own bonus and raise at work, I started to see things in a different light. Call it the reverse of the Pay Yourself First principal. The idea is a simple one – Spend no more than 15% of your windfall and save or invest the rest.
How It Works.
By spending 15%, you get the psychological effect of (short term) reward while still maintaining 85% of your found money to put to work in a high yield, online savings account or pay down debt or invest for the long haul (the REAL reward). It’s instant gratification AND long term reward – the best of both worlds.
The psychological factor is the key. I’ve been very disciplined in the past – I would jack up my automatic savings plan to match the amount of my raise, and I found is that this would work according to plan for a few pay periods. The problem for me was that it worked too well. The whole point was to act financially like I hadn’t gotten a raise and I’d be that much closer to my goals. The reality was that my financial self was more than happy, but the emotional (or human) side of me felt somewhat depressed that I hadn’t seen any of this supposed reward.
The Result Was Self-Sabotage.
I would over compensate by spending more. I spent less than my increase, but that amount would still be enough to cause a shortfall that would wreck all kinds of havoc on automatic money transfers and the like. In the worst case, it would cascade into a bank over draft fee at some point thus costing a lot more than the proposed 15%, and delaying the very financial goals that were supposed to have been reached quicker as a result of the raise!
You may think this 15% factor is not enough, or that you’d need to have a windfall of a couple hundred dollars at least, but that’s not really true. Sure, it’s a lot nicer when you’ve got a $1,200 stimulus check, but even small amounts work. For example, say you sold some “junk” you found in the closet on eBay or Amazon for $50. That 15% comes out to $7.50. Not much you say? Ah, but it’s still a cup of coffee and bagel on your way to work, or a discount CD, DVD or book. And the best part is you still have over $40 that you didn’t have before.
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