A budget will help you spend

Tens of thousands of workers up and down the country will have received April’s pay a couple of weeks ago and many will have seen that pay reduce from what they are used to. Many employers will have taken advantage of the government’s Job Retention Scheme to help them to continue to pay their staff, and this could have the effect of reducing take-home pay, while other employers have imposed wage reductions on all staff. And many other employees, and many of the self-employed, have lost all or their work and are still waiting on some form of government support to filter through.

All of this makes it really important that we are thorough in the way we deal with our money this month, and in fact every month until this crisis is over. A budget is more important now than it has ever been to help you make sure that you can pay the bills you need to pay every month and still have enough to live on once these bills are paid.

A budget can help you to spend your money efficiently by showing you where you currently spend money, and allowing you to decide whether what you’re currently doing is the most efficient thing that you can be doing. It’s not designed to stop you spending money, although that’s the way many of us see it, and that’s why so many of us don’t use budgets.

And a budget will help you work out whether you do actually have enough money to pay all of your bills and if you don’t will help you decide which ones you are able to look at delaying for a few months.

Make a list of all of the direct debits that you need to pay this month, work out how much you have left after they are all paid, and then calculate how much you have left to live on every week.

If there are bills that you don’t think you will be able to pay then make sure you call the lender and discuss your situation with them before payment is due.

If you take a formal holiday from your mortgage, credit card or personal loan payments then these missed payments shouldn’t have any impact on your credit history. If you just cancel your direct debit and don’t make a payment without talking to your lender then you might find a black mark on your credit rating, and this could make it more difficult to get credit in the future.

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