Budgeting tips for low income families

I meet a lot of families who are struggling on a low income.  Here are just a few things you can do to make life a little easier.

1. Create a personal budget

A good starting point is to work out what money you have coming in and what’s going out. Making a budget gives you a good idea of where your money goes, and shows you where you might be able to save money. It will also help you see whether you are living within your means.

You can find information and guidance on completing a personal budget from National Debtline. If you’re in debt, you’ll also need to know if you’ve got enough money to start paying your debts off.

2. Claim all the benefits you’re entitled to

You can find lots of information about benefits for families here https://www.gov.uk/browse/benefits/families. I would also recommend that you complete the Benefits Adviser online calculator to find out what you are entitled to https://www.gov.uk/benefits-adviser.

 3. Find ways to cut costs and become a savvy shopper

You often have more control over what you spend than the amount you have coming in.  Review your personal budget to find out if there is anything you can easily cut back on, or shop around for a better deal. View Money Saving Expert on how to boost your income, and the Money Advice Service Cut-back calculator.  You might be surprised at how much small things add up!

3.1 Use comparison and cashback websites

Whether you want to save money on for example, car insurance, utility bills or your mobile phone contract, use the top two comparison sites MoneySupermarket.com and GoCompare.com to compare prices from retailers.  Also check Confused.com and Comparethemarket.com.

Once you’ve found the cheapest quote on one of the comparison websites, visit one of the top Cashback websites to find out if the retailer can offer you cashback on that product or service.

Set up a free account with one of the top Cashback sites such as Top Cash Back, log-in and then click on the retailer and product or service you are interested in.  The Cashback website then takes you to the retailer’s website where you make the payment.  Before you make the payment, check the price is the same or a similar amount to the original price you found through the comparison website.  The payment is then tracked and you will be paid cash via the cashback website. However, please note that cashback sites can only pay you if they get the money from the retailer.  Also ensure you test the tracking on the cashback website.

For further information on how to save money on utilities and phones, view http://www.moneysavingexpert.com/utilities/.

3.2 Supermarket Shopping

Plan your meals for the week and write a shopping list based on a budget – this may help you to avoid making impulse purchases.

When you’re at the supermarket, buy items from the top and bottom shelves; high value items are always placed at eye level.  Try some of the Own Brand or Value products and see if you notice any difference.

You may want to consider visiting your supermarket at a specific time of the day when prices of products (near their sell-by-dates) are reduced.  You can ask one of the staff at your store to identify the best time to visit.  At most supermarkets, the largest reductions usually start at 7pm.

Alternatively, we highly recommend the supermarket comparison site mySupermarket which allows you to compare prices of products at each supermarket at a glance. You can select which supermarket you usually shop at (Tesco, Asda, Sainbury’s or Ocado) and mySupermarket will make you aware of cheaper products by showing you a £ icon. If mySupermarket shows there are more savings in one of the other supermarkets on this website, you can switch supermarket by clicking on the supermarket tabs. Before you start ordering, you must check that the supermarket can deliver in your area and how much they charge for delivery.  The benefit of food shopping online is you can calculate how much you’re spending as you add each item to your cart and ensure you keep within your budget!

You may wish to consider downshifting your supermarket. We highly recommend ALDI for staple goods and they have a great selection of fruit and vegetables that are often half the price of other supermarkets.  Aldi like most supermarkets will stack from the bottom or back of the shelf, so reach to the back or bottom of the shelves to find the longest ‘use by’ and ‘best buys’ dates.

3.3 Get holidays for less

Take a look at the Money Advice Service guide on how to save money on holidays https://www.moneyadviceservice.org.uk/en/articles/get-holidays-for-less

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Support our local credit union

Following a meeting with Kernow Credit Union (KCU) yesterday, I am feeling inspired. Apart from the standard savings and loan accounts, KCU offers junior savers accounts for under 16s, and a Christmas savings account. The junior savers account paid a dividend of 2% last year!

KCU is a not for profit company which makes a strong contribution to communities badly affected by extortionate loan sharks, expensive credit and pay day lenders.

I am a true advocate of KCU’s savings culture, where members can take out a loan only after showing they can save for 13 weeks.

It is well worth taking a look at the services they offer. KCU have many service points across Cornwall where you can deposit and withdraw your money.  Visit their website for more information http://www.kfcreditunion.co.uk/home.aspx

Welfare Benefits Reform

The government is aiming to make the benefit system fairer and more affordable to help reduce poverty, worklessness and welfare dependency.

You may have heard about the welfare reform changes that started in 2013. Many existing benefits are due to be abolished and replaced by a new benefits system.

From our experience of supporting the long-term unemployed, it is often assumed that you will be financially worse off if you move into work, and consequently lose benefits. However once we’ve completed the sums, we find this is not the case, and of course there are a great number of benefits to gaining employment!

If you’re on a low income or struggling to make ends meet, you might need help to sort out your personal budget, and work out how to make your money go further. You can find information and guidance on completing a personal budget from National Debtline. If you’re in debt, you’ll also need to know if you’ve got enough money to start paying your debts off.  If you need debt advice, please ensure you approach a free service provider and one that has a Credit License in place. Smart Savings has held a Credit License since 2009 to provide debt counselling and debt adjustment on a non-commercial basis.

For a summary of the welfare benefits reform, please read on.

Universal Credit will replace many existing benefits

Universal Credit (UC) is a single means-tested benefit which is paid to people of working age. It replaces most means-tested benefits including:

• income-based Jobseeker’s Allowance (JSA)
• income-related Employment and Support Allowance (ESA)
• Income Support
• Housing Benefit
• Working Tax Credit
• Child Tax Credit.

Personal Independence Payment replaces Disability Living Allowance

Personal Independence Payment (PIP) is a benefit for people who have a long-term health condition or disability that means they have trouble getting around or need help with daily living activities. It will eventually replace Disability Living Allowance (DLA) for people aged 16 to 64.

If you’re already getting DLA, your claim won’t automatically be transferred to PIP – you’ll have to make a new claim.
In June 2013 new claims for PIP started in the rest of the UK. From October 2015 the Department for Work and Pensions (DWP) will start contacting anyone still getting DLA and invite them to make a new claim for PIP. If you don’t claim or if your claim is unsuccessful, your DLA will stop.

Council Tax Benefit is replaced by local schemes

Before April 2013, the amount you got in Council Tax Benefit was worked out according to a national formula that was the same wherever you lived. From April 2013, local authorities were responsible for running their own Council Tax Reduction Schemes. Older people will be protected from any cuts to the rebate. However, if you’re under the age for getting Pension Credit, you will have to pay some money towards your Council Tax bill.

A Benefit Cap has been introduced

The Benefit Cap means there is a limit on the total amount of money from certain benefits you can get if you’re of working age. To begin with, the cap will only affect you if you’re getting Housing Benefit and you may get less money towards your rent. If you’re not getting Housing Benefit, your benefits won’t be capped.

Use the benefit cap calculator to find out how the benefit cap affects you.

Benefit appeal rights change

There are changes to the rules about appealing against a benefit decision. You must ask for the decision to be reconsidered before you can appeal to a tribunal.

New conditions about looking for work

When Universal Credit is introduced, if you’re out of work or in work but on a low income, you’ll have to sign a new ‘claimant commitment’. This will set out a number of work-related requirements you’ll have to meet before you can get your benefit.

Parts of the Social Fund are abolished

If you get certain benefits, you may be able to get a payment or loan from the Social Fund to help towards the costs of certain unexpected or one-off expenses.

However, as part of welfare benefit reforms, parts of the Social Fund have been abolished, including Community Care grants and Crisis Loans.

Money has been given to local authorities which they may choose to spend on replacement schemes, but they don’t have to. They could choose to spend the money on other things instead, such as local foodbanks and schemes which provide subsidised furniture and white goods.

Child Benefit stops for high earners

Families where one parent earns £50,000 a year or more will get less money in Child Benefit. Families where one parent earns £60,000 will have to decide whether to stop getting the benefit.

Will your income from benefits be lower after the changes?

To begin with, people getting certain benefits will be protected if their income drops once they move on to Universal Credit. This is called transitional protection. There is no transitional protection for people currently getting Disability Living Allowance or Housing Benefit. This means that, for people getting these benefits, your income may go down as soon as you move on to the new system.

Source: Citizens Advice Bureau http://www.adviceguide.org.uk/england.htm

There are many websites that are dedicated to keeping you up-to-date with the latest changes. For more information, visit:

Welfare benefits reform – what do the changes mean?

GOV.UK

Cornwall Council

Saving money and energy at home

There are lots of ways you can save money and energy at home.

Leo Hickman, author of ‘The Good Life’ (2005), Guardian Books, provides the following top tips.

LAUNDRY:
• Wash all clothes at a maximum temperature of 40c.
• Line dry clothes – outdoors or indoors wherever possible.

KITCHEN:
• Put a lid on a pan when boiling water – it will boil up to six times faster. Once the water is boiling, turn it down as most energy is used bringing water to the boil. Match the size of the ring to the pan being used.
• Don’t open the oven door during cooking – you lose over 20% of the heat each time you open it!
• Turn the oven off a few minutes before you are due to take out the food – most modern ovens are well enough insulated to prevent any significant heat loss by doing this.
• Ensure food is defrosted before cooking
• Extractor fans are rarely effective- open the window instead!
Fridges/Freezers:
• Regularly defrost your fridge and freezer to maintain efficiency.
• Keep fridge temperature between 3c and 5c using a fridge thermometer.
• Keep the condenser coils at the back clean and make sure they are not pushed up too close to the wall.
• Do not put hot or warm food in the fridge or freezer.
• Defrost things overnight in the fridge – the cooler temperature of the frozen food will allow the fridge to save energy.
• Fill any empty spaces in either a chest freezer or an upright freezer. Use empty cardboard boxes to minimise the airflow and save energy that would otherwise be spent fanning the air.
Dishwashers:
• Turn your machine off and open the door just before it enters its drying setting. Air drying dishes this way saves significant amounts of energy.
• Wait for the dishwasher to be full before you use it – avoid using the half load setting which uses more than half the amount of energy and water.

BATHROOM:
• Use a shower (but not a power-shower!) – they save water as well as the energy used to heat the water.
• Don’t shave or brush your teeth using a running water tap.

LIGHTING:
• Use energy efficient compac fluorescent lightbulbs (CFLs) where possible. They save up to 80% on lighting costs and last for years.
• Don’t overlight rooms needlessly.
• Uses sensor lighting outdoors to cut back on energy wasted by permanent security lighting.
• Ignore the myth that fluorescent strip lights are more efficient if left on continuously. If you are leaving a room for more than a minute, turn the light off.

CENTRAL HEATING:
• Make sure your boiler is serviced at least every two years. Replacing a 15 year old boiler could save you 20% on your fuel bills (or 32% if a condensing boiler is installed), and up to 40% if you install the right heating controls.
• Place aluminium foil (shiny side out) behind your radiators to help reflect heat inwards.
• Lowering your thermostat by just 1c can save up to 10% on heating bills. A home should not be heated above 19c – if you have a baby, heating above this temperature is discouraged by health professionals.
• When away from home for more than a few days during cold spells, remember to lower the thermostat and readjust any timers to make your heating come on for just a few hours a day. Likewise, the heating should be set to go off when you are asleep.
• Place your thermostat on an inside wall and away from draughts.
• Regularly bleed radiators to rid them of inefficient air bubbles.
• Lag water tanks and fit draught excluders where possible.
• Turn the hot water temperature down – it’s better to have hot water at the right temperature than cooling it down with extra cold water.

LIVING ROOMS:
• Don’t leave your electrical equipment on standby. Leaving our TVs, DVD players, VCRs, hi-fis, set-top boxes and PCs on standby is estimated to waste 15% of domestic energy worldwide.
• Unplug mobile phone chargers, and any adapters that may be attached to your electrical appliances such as computers, phones etc when they are not in use.
• Don’t put chairs and sofas against outside walls where you will feel the cold and draughts the most.
• Keep internal doors closed as much as possible.
• Block up unused fireplaces. Consider replacing open fires with wood-burning stoves.
• Try not to smoke indoors – it can lead to a 50% increase in heating costs because windows are left open for ventilation.

LOFT AND FLOORS:
• Make sure your loft and cavity walls are well insulated Installing to a depth of 250mm (10 inches) can save your around 25% of your heating costs.
• Fill gaps in the floor boards and place newspaper beneath a carpets underlay for extra insulation.

WINDOWS:
• Small gaps in windows are responsible for up to 20% of a home’s heating loss. Consider investing in double glazing for your windows, but remember that double glazing requires good ventilation otherwise it can encourage damp. A much cheaper alternative to double glazing is to apply purposely designed plastic sheeting to the inside of each pane.
• Close the curtains when a room is not in use during the daytime – it will keep the room cool in summer and warm in winter.

You can also get advice from the following organisations:

Community Energy Plus http://cep.org.uk
Energy Saving Trust http://www.energysavingtrust.org.uk/Take-action/Energy-saving-top-tips

The cost of a baby

My first blog is one that is very close to my heart, the cost of having a baby. In the last nine months I have been on an amazing adventure with my first baby girl, but what has it actually cost me? Apart from being emotionally-life-changing, having a baby can have a considerable financial impact too.

I of course did my research before my daughter was born and found figures such as £9000 quoted online as the potential cost of a baby in their first year!! However I realised this figure was based on new mum’s buying everything new.

I am naturally thrifty and enjoy saving money because of the choices it gives me and my family in life, and therefore I was determined to keep my costs to a minimum. I hoped my personal budgeting and planning skills would put in a strong position.

Two months before my baby was born, I sorted out all the benefits I was entitled to. I completed the Child Benefit form, although I couldn’t submit the form before my baby was born because you need to detail your baby’s date of birth and register her birth. You also need to send a birth certificate with the form.

It really helped me to complete the form in advance, particularly when you are struggling with sleep deprivation in the first few months. You can find the Child Benefit form here http://www.hmrc.gov.uk/childbenefit/forms.htm. I also knew I was going to start my maternity leave about a week before I was due to give birth, so I completed ‘Form MA1’ for Maternity Allowance as I didn’t qualify for Statutory Maternity Pay. You can find out more information about maternity pay here https://www.gov.uk/search?q=maternity

You can also find lots of information about benefits for families here https://www.gov.uk/browse/benefits/families. I would also recommend that you complete the Benefits Adviser online calculator to find out what you are entitled to https://www.gov.uk/benefits-adviser.

I knew all of my family and friends would want to buy something for my baby when she was born, so my husband and I created an Amazon wishlist of all the items we needed such as a baby monitor, room thermometer, grobag and nappies. This list ensured family and friends didn’t waste money on items we didn’t need. You don’t have to just add items from Amazon, you can also save money by adding items to the list from external websites such as eBay.

I admit, in the first month I had very little idea of how much I was spending on groceries and the emergency trips to the supermarket for nappies and baby wipes, but when I finally got some precious sleep, I started adding up how much I was spending.

I found eBay to be excellent with finding second hand baby items locally. On the rare occasions that I do buy clothes I always buy the next size up to maximise wear. We were given some hand-me-down clothes, which really helped particularly when they were bigger sizes. You can bulk buy good quality baby clothes on eBay for a fraction of the price retailers charge. I also used a cashback website ‘TopCashBack’ to convert any money I had saved into Tesco clubcard points. I then doubled my points at Tesco to use in their clothing section in the January sales.

It always amazes me when I meet clients who are in debt and have children, with how many who actually buy brand new baby clothes and prams. Many mums, particularly those on lower incomes, tell me they now regret spending so much. Retailers are very clever at persuading us to part with our money, but from my research, many supposedly essential purchases turn out to be anything but!

Family Action reported there research has shown that some poorer parents have to cut back on essential needs such as food and heating in order to afford baby-related costs.

Early on, I realised you can save money by joining various baby clubs with supermarkets and other relevant organisations because they send you coupons. I also remembered to use the coupons received in my Bounty packs.

When my baby was at the weaning stage, I discovered the 99p store and Poundland’s small but amazing baby section. I bought packs of bowls for £1 instead of £2.99, sets of plastic pots to keep food in for £1 instead of £1.99, beakers, bibs and later plates. I ended up with about £18 worth of feeding equipment for a total of £7. These stores are also surprisingly good for baby food – I bought packs of Organix finger foods. The only problem is that you can’t guarantee what will be available when. If you see it, buy it! The best way to save money on baby food is of course to make it yourself. I plan my meals for the week and write a shopping list based on a budget – this helped me to avoid making impulse purchases.

When you’re at the supermarket, buy items from the top and bottom shelves; high value items are always placed at eye level. I highly recommend the supermarket comparison site mySupermarket.com, which allows you to compare prices of products at each supermarket at a glance. You may wish to consider downshifting your supermarket. I highly recommend ALDI for staple goods and they have a great selection of fruit and vegetables that are often half the price of other supermarkets. Aldi like most supermarkets will stack from the bottom or back of the shelf, so reach to the back or bottom of the shelves to find the longest ‘use by’ and ‘best buys’ dates.

The approach I’ve taken to everything: if it’s on offer and you know you will need it in six months, buy it now. Sainsbury’s sometimes has 25%-off clothing days, which is the time to stock up on socks and basics vests, unless you can buy them cheaper elsewhere.

As some friends pointed out last year, I was able to go to NCT sales, despite not being a member, and actually did well by not being there during the members-only bit at the start as people start to mark things down towards the end.

I have avoided weekly baby music and activity classes that require paying in advance. For our singing and stories we tend to go to the library or children’s centres. Without paying to join the NCT I’ve been lucky enough to meet lots of great mums nearby, and once there are two babies in the room they don’t seem to mind that the entertainment is free.

Well, nine months have passed, I kept all the receipts, recorded everything since my daughter was born – and the truth is that you can give a baby everything he or she needs and keep the cost down to the hundreds rather than the thousands.