Just when everything is ticking along nicely, you get a financial change and have to readjust. We have those days too, so here’s how we deal with them…
If a bill goes up (as 3 of ours have since June) then sit down and discuss it:
- Do we need this service? Is it essential/can we afford it?
- Is there a better deal on the market? If so can we switch without penalty (or at least with a penalty smaller than the increase)?
- Where is the extra coming from? If we stay with this provider, is there somewhere the money can come from, to pay the difference, without affecting essentials?
- Is it long term (like water rates increases) or just a one-off (e.g. a high phone bill) ? You may be able to go without a clothes budget or something for a one-off but that wouldn’t work long term.
For example, our phone and broadband went up around £3 per month, but we’re happy with the service so we took that out of our social budget, permanently. Which brings me to the next point…
Adjust your budget sheet accordingly:
- You have to update your budget sheet to show the bill increase and where it’s come from (so my phone and social amounts need updating). If you are in a debt repayment agreement, the company may need to be told if it affects your essentials or your debt repayment amount.
Good News! Extra income!
It works the same for money coming in: If you make money from a hobby, get a bonus or a tax rebate, the same rules apply:
- Discuss where you’ll spend or save it and how much? Will it go to pay off debts or into savings or replacing something that needs replacing?
- Does it affect monthly budget? (If you pay off a bill or debt…or you invest in a more efficient piece of equipment…it will impact your monthly outgoings)
- Who needs to know? If you are claiming benefits or on a debt repayment program, they need to be told about significant changes (obviously we’re not talking the aforementioned £3) E.g. In the UK current legislation requires you to inform Local Authority if you claim benefits and your savings go over £6000.
If there is a big change, don’t be scared to ask for (free) advice from a professional.
If your budget is in order, good or bad financial news shouldn’t make that much difference…. and if you haven’t got a written budget then starting one when these changes arise would be beneficial.
I hope you have an awesome day and that your news will be good!