Money is necessary in our lives, it provides the roof over our head and the food we eat. Beyond those basic needs, our individual money experiences can differ dramatically.
Some of us have more money than others and the difference is how we relate to money. It is not a subject we often consider, when you think about money, what are your feelings, does it give you a sense of power or does it make you nervous. Would you prefer to avoid the subject of money altogether, whether aware of it or not we each have a relationship with money.
While money is necessary, it doesn't buy life satisfaction, it is a tool. Money buys us the bed on which we rest, the food we need for our sustenance, a car for our transportation and clothing for warmth and modesty. You choose your bed whether deluxe or practical. You choose your food whether for pleasure or nourishment. The car you drive may represent status, speed or economy. Your clothing may be fancy or plain. While money acquires the goods, our personal emotions may play a role in our choices.
We make a living by what we get. We make a life by what we give (Winston Churchill)
Managing your money
Good money management can mean many things, from living within your means to saving for short-term and long-term goals, to having realistic plans to pay off your debts.
Setting up a budget
If you want to get on top of your finances, a budget is a good way to start. Set up and maintain a record of money coming in from things such as wages, pensions or benefits and payments that you make such as your rent or mortgage, insurance and council tax along with other living expenses. Make sure you include one off expenses such as car tax, Christmas presents etc.
You can set a budget up by using a spreadsheet on your computer or just write it all down on paper. If you have a computer you can find online budget planners such as the Money Advice Service budget planner or you can call them on tel. 0300 500 50 00.
Check where your money goes
If you find you’re spending more each month than your income the next step is to look more closely at where your money is going and where you can cut back. Even small amounts for things such as magazines, sandwiches at lunchtime or takeaways can add up. Try making a note of what you spend for at least a month including small purchases. If you can do this for longer then you will get a fuller picture of what you spend your money on.
Don’t forget to cancel direct debits for subscriptions or policies you no longer want or need.
What are benefits?
Benefits are payments made to individuals under the Social Security System run by the Department of Works and Pensions (DWP). There are various benefits designed to meet different kinds of needs.
State pension is payable to people who have reached state pension age, child benefit for those who have children, statutory sick pay to employees who are absent from work due to illness and jobseeker’s allowance to people out of work or looking for a job. Housing benefit provides help with paying rent and council tax benefit provides help with your council tax payments if you are on a low income.
Are you entitled to benefit payments?
To find out if you’re entitled to any benefits you will need to either use a benefit calculator, such as the one provided by Turn2us. You can access their benefits calculator online or you can call them on freephone 08088 02 20 00.
Further information and support is available from the GroceryAid Helpline advisers on freephone 08088 021122, your local council, Citizens Advice, Job Centre Plus or Age UK.
When you retire you'll need money to support you and enable you to have a decent standard of living.
Most people receive a State Pension but it's also a good idea to top this up if you can with your own pension, to make sure you'll have enough money to see you through your retirement. On our Pensions page, you can find out about the different ways you can save for your pension, how to get started and what to think about when you're getting near to retirement.
The government also has a ‘Guidance guarantee’ that all individuals over 50 years of age with a defined contribution pension scheme will be offered free and impartial guidance at the point of retirement. Pension Wise covers a range of options to help you make sound decisions and take informed action, whether that’s seeking further advice or purchasing a product. It also tells you about different types of pensions and what you can do with your pension pot, what’s tax-free and what’s not.
Your ‘savings’ are the income not spent or that which has been set aside for a future purpose. Methods of saving include putting money aside in a deposit or pension account, as an investment or even as cash stashed away in a safe place.
If you struggle to make ends meet towards the end of the month, finding a little extra to put aside may seem like a far off reality, but even if you think you can’t afford to save, the golden rule to remember is that no amount is ever too small.
Even small saving amounts can come in handy and stop you tipping into debt if things go wrong. Saving loose change can add up and by the end of the week, many of us have a few coins left over in our pockets and purses. By gathering up these coins each week and putting those coins in a jar, even if it’s just £1 a week in loose change, will give you more than £50 by the end of the year.
Many people borrow money for making large purchases that they could not afford under normal circumstances. A debt arrangement gives the person borrowing permission to borrow money under the condition that it is paid back at a later date and usually with an additional interest payment.
Don't know where you stand with money? Take the free Health Check from the Money Advice Service. You'll find out which areas to focus on and practical ways to improve your situation. The service offers free and unbiased advice, from building your savings to repaying debt
If you’re overwhelmed with debt
The hardest part of paying off your debts is taking the first step. It’s easy to feel overwhelmed if you know you’re struggling financially. Burying our heads in the sand and ignoring bank statements and demands for payments will not make your situation better, it could make it worse. Take a deep breath and open any letters you've been ignoring, once you have done this, you will know what you have to deal with and can work out what you need to do next.
In order to succeed, we must first believe that we can (Nikos Kazantzakis)
Help with coping with your debt
One of the first steps to take is to assess your level of debt. GroceryAid works with StepChange Debt Charity to offer a free, confidential and impartial advice and support. To find out more and begin to assess your debt use the StepChange Debt Remedy Tool.
Further information and support is available from the GroceryAid advisors on freephone 08088 021122 or from StepChange on 0800 138 11 11.