The new school year has just begun and with it, its associated costs.
The list is endless and it’s like a financial vicious circle. Most people could not afford to cover the back to school costs out of their income. Many families are still recovering from the effect of the extra financial burden placed on them.
Mortgage/rent, electricity, gas and many other household bills are no doubt neglected. Loan repayments and credit cards are left unpaid. Also, for some the money lender is their saviour.
Being unable to pay your household bills and debts can spiral out of control. It can cause feelings of helplessness and stress. It can also have an enormous negative impact on our family’s lives as well as our health and wellbeing. So what can you do about it? Budget.
What is a budget?
A budget is a plan for managing your money and how you spend it.
A well-planned budget will help you to organise the money coming in (income) and the money going out (expenditure). Your spending should be less than or, at most, equal to your income.It will help you to manage better and worry less.You will then be able to make better decisions about how to spend your money. It will help you to plan for bills and unexpected expenses and also to save for special needs or events
The best time to plan your budget is when you get paid or at the beginning of every week or month. You may need to make a new budget if things change, for instance if you suddenly need to pay for extra healthcare or if there is a change in your income.
First, add up all the income that comes into your household. All income, after tax and levies have been taken from it. Only include overtime if you receive it regularly. Check that you are paying the right amount of tax and claiming all your tax allowances, social welfare benefits and child benefit payments. Include contributions from other people who live in your home, such as adult children or partners (non-dependants) Try to make sure that any non-dependent person living in the house is paying enough towards the household expenses.
If you are finding it difficult to make ends meet, you may be entitled to money which you are not claiming. The Citizens Information Helpline on 0761 074000 www.citizensinformation.ie or www.revenue.ie provides information on entitlements and claims.
Work out with your family how much money you need to spend each week on basic living expenses. You can get a free Weekly Spending Diary from MABS ph 0761 072000, or visit our website, www.mabs.ie.
You can use this spending diary to keep track of all your spending. We recommend that you do this over a four-week period. The spending diary will help you to see where your money is really going, rather than where you think it’s going. Include all of the following outgoings.
Rent or Mortgage
If you are paying rent to a local authority, make sure you are paying the correct amount for a person on your income. It is important to fill out your annual review form, so that the local authority is aware of any changes in your circumstances.
Housekeeping
This should include food, toiletries, cleaning materials etc.
Gas and Electricity
Call your electricity and gas suppliers and ask how much your bill was for the last year. Divide that amount by 52 to get an average weekly cost. If your usage is very high, enquire about energy efficiency from www.seai.ie. If you are worried about being disconnected, you should seek advice from the MABS Helpline, 0761 07 2000.
TV Licence
Divide the cost of the licence by 52 in order to get a weekly payment or divide by 12 for monthly payment. If you do not hold a current licence you may be fined. You can purchase TV licence stamps from your local Post Office.
Clothing
Estimate how much you spent last year on clothes for yourself and your family. Divide the amount by 52 to estimate the weekly cost.
School Costs
Estimate how much you spent last year on sending your children to school. Include the cost of school uniforms, books, fees, trips, contributions and the smaller amounts you’re asked for every few weeks. Divide that sum by 52 to estimate the weekly cost.
Phone (landline and mobile):
Only include your ongoing bill. If you are worried about being disconnected, you should seek advice from the MABS Helpline on 0761 07 2000.
Yearly Costs
This includes car tax, car insurance, home insurance etc. Divide these yearly costs by 52 to estimate the weekly cost.
Loans
If you pay back loans by the month, multiply the monthly amount by 12 to see how much you have to pay back in the year. Divide that figure by 52 to get the amount you will include in your weekly budget plan.
Holidays and Entertainment
It is important to include this in your budget plan, because all work and no play is not good for you!
Savings
Be sure to put some money aside, no matter how small, for a rainy day or that special occasion.
An ‘OK’ budget plan
You will know that your budget is ok if you have more money coming in than you have going out. This gives you the opportunity to save more money.
A ‘Not OK’ Budget Plan.
You will know that your plan is not ok if you have less money coming in than you have going out. You will have to look again at your budget to see where savings might be made.
See if you can reduce the weekly cost of other items. Shop first for what you need and then for what you may want. Shop from a list you have prepared, covering the basic food needs for the week. Shop around for the best prices and special offers.
Please note: To change a monthly bill to weekly multiply by 12 and divide by 52. To change a weekly bill to monthly multiply by 52 and divide by 12. To change a yearly bill to weekly divide by 52 or to change it to monthly divide by 12.
The Money Advice and Budgeting Service has helpful information, budget sheets and sample letters available on the www.mabs.ie. Advice and information is also available by calling the MABS helpline 1890 283438 (Monday to Friday 9am to 8pm.)
Dublin South East MABS is contactable on 076 1072520 or by e-mail at Pearse_street@mabs.ie
