Families will need to manage reduced finances

Many families will need to make significant changes to avoid future problems with finances.

08:46 09 June 2013

The latest news in the cuts on welfare spending is that families may lose up to £1,800 per year. This can be a significant amount for many families, and the change could take place as soon as 2015.

 

Families could prepare now for the possible loss of that income and find other ways to manage their finances to lessen the potential effects of the change. 

 

• Reduce expenses-depending on your finances, you may or may not need to do this as soon as possible. Definitely reduce unnecessary expenses where possible. Begin first with the extras such as reducing the number of times you eat out, or purchase specialty coffees or ice creams. Reducing things in this manner allows you a few splurges but helps you save money. 

 

• Income-if you can’t cut enough from your budget, start looking now for promotions or ways to improve your income. If you begin shortly, you won’t feel pressured into doing something desperate with your finances and you’ll be nicely set to weather the coming changes. This is also a time to play it a little safe, so if you try to start a business on the side go for minimal investment and do just enough to try and obtain some income. Once it’s successful you’ll be free to invest more in your business, but you want to make sure you can have extra coming in and starting a business often sucks additional money out of your budget, rather than putting it into your budget. 

 

• Relocation-while you may not really want to move, and there’s no guarantee that you would be able to sell your home, it’s an option you may need to consider. If your finances are already tight, look for a less expensive area to live, check utilities, petrol costs, and food prices. If you find out that you will save a significant amount, start the process so you have enough time to save some money.