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How to budget on a small income

Budgeting is important no matter what your income so that you can keep track of your finances and achieve your financial goals. Of course, budgeting on a low income can be challenging – it isn’t just a case of what to do with your surplus income, but more how to actually have some surplus income in the first place. In this post we’ll be sharing some tips on how to budget on a small income so that you can actually save some money rather than living from paycheque to paycheque.

1) Review your current budget

A vital first step is always to get a good picture of your current financial situation. To do this, you’ll need to examine both what’s coming into your household each month – and of course, what’s going out in monthly expenses.

When you’re on a low income, this can feel particularly difficult – it’s never fun to see the cold, hard truth, especially if it shows that you’re not currently living within your means.

Don’t panic though – it’s much better to know exactly what’s going on with your money than to get a nasty shock down the road. It doesn’t matter how bad your situation, there’s always support available to help you to get back on track.

Have you seen our recent post where we share our 5 Budgeting Tips for Beginners?

2) Look at where you can cut costs

Now you know exactly what you’re spending, you can start to look at areas where you can cut costs. Usually, our biggest expenses are our accommodation, our cars and our bills, such as gas and electric. These can be a good place to start.

Try using comparison websites to review and compare your bill payments – it can be a great way to make some serious savings.

It can be easy to feel like a few pounds here and a few pounds there won’t make much difference, but even small reductions soon add up and can make a real impact on your budget.

For more information, check out this great article from the Money Advice Service on ‘How to save money on household bills’.

3) Maximise your income

Make sure you’re fully aware and making use of any benefits you’re entitled to. Try this handy Benefits Calculator from The Money Saving Expert.

4) Prioritise paying back high interest debts

Your money is better spent paying back debts with high interest rates, than going into a savings account with a much lower interest rate.

5) Continue to track your finances

Tracking your money on an ongoing basis can often be quite eye opening. It’s also a great exercise when it comes to staying within a budget. When we monitor what we’re spending, we have the opportunity to ask ourselves if it’s really worth it – and that can only be a good thing!

Lastly, don’t forget that the VRS are here to help. If you’re going through a period of financial vulnerability for whatever reason, then registering can be a great way to protect yourself from additional financial harm or anxiety.

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5 Budgeting Tips for Beginners

The start of a new year often reminds us to take a look at our finances and our spending habits. We’re encouraged to set resolutions around saving money, paying off debt or making that big purchase such as a holiday, house or new car.

To many people, this can feel like a far-off dream – and even quite overwhelming, but the truth is that any financial goal starts with how we budget for our household. In this post, we’re sharing a few simple tips to get your household finances in order so that you can reach your financial goals in 2020.

What is a budget?

Put simply, your household budget is a plan for how you will use your income. Your overall income is assigned between your monthly expenses, savings and debt repayments.

Why use a budget?

Statistics show that households who use a budget are less likely to live from paycheque to paycheque. Budgeting allows you to identify financial problem areas before they become serious. A budget also helps you to save more money and to track and stay on target with financial goals.

Budgeting tip 1: Set budgeting goals

Establish what you want to achieve with your budget. This will give your budget both purpose and focus. There are a number of goals that you may want to consider, but the most common are related to:

  • Saving money
  • Reducing debt
  • Reducing stress caused by finances

Don’t forget to be specific with your goals. Instead of ‘saving money’, decide an actual figure that you want to reach – for example, ‘I want to save £100 per month’ or ‘I want to save £5000 for a new car’.

Budgeting tip 2: Calculate your income

In order for your budget to work, you’ll need a starting point. How much money is coming into your household each month? This sum will include any income from jobs, businesses, pensions, investments and benefits etc.

Budgeting tip 3: Create a list of household expenses

Now you know how much money is coming into your household, it’s time to look at your spending habits. This may feel a bit painful at first, but it’s a really helpful process to go through and will give you a much clearer picture of your financial position.
An easy way to do this is to go through a recent bank statement and note down all your regular expenses. Don’t forget to include things like groceries, nights out and new clothes.

You might also want to include an amount for more irregular expenses over the year such as Christmas, birthdays and car tax.

Budgeting tip 4: Calculate your surplus income

Hopefully, your monthly income will be higher than your expenses. If you find that isn’t the case, then take a look at your expenses again to see if there’s anything non-essential that you can cut back on.

You can also look at ways to increase your income, such as overtime or a side business.

If you’re struggling to find a way to make the numbers work, then it’s a good idea to get some advice. Try chatting to your local Citizens Advice Bureau who are trained to offer this type of support.

If your income is greater than your expenses, then this will give you a realistic idea of how much you can assign to your savings or debt repayment goal each month. This is your surplus income.

Budgeting tip 5: Set a timescale

The final step in creating your household budget, is to set yourself a realistic timeframe to complete your goal. If your goal is to pay off £5000 of debt and you can see that you have £500 per month surplus income, then a sensible timescale would be 10 months.

Household budgeting may feel overwhelming at first, but if you follow these steps, you’ll have your budget in place in no time. Good luck!

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5 Resources to help with gambling addiction

When people talk about addiction, we tend to think about drug or alcohol addiction – but more and more people are struggling with gambling addiction, especially with the rise of online gaming and betting. If you or someone you know is struggling with a gambling problem, then you may feel pretty alone and it may also feel like there’s very little help or support out there because so few people are talking about the very real issue of the growing numbers of people addicted to gambling in the UK.

The good news is that there are resources to help with gambling addiction and in this post, we’re going to share a few of the best.

1) The NHS

If you think you have a problem with gambling, then one of the very first resources you should make use of is the NHS. Your local GP will be able to talk to you about the support that’s available such as Cognitive Behavioural Therapy which has been shown to have great success rates when it comes to treating all forms of addiction, including gambling addiction.

2) GamCare

One of the biggest national providers of support for gambling addicts, GamCare runs the free National Gambling Helpline (0808 8020 133) 24 hours per day, 7 days a week. They also have a wide range of self-help resources on their website, such as a goal planner, a gambling diary and stress checklist.

Gamcare recommend self-exclusion, which means speaking to gambling operators and asking them to exclude you from their services for a certain period of time.

3) The VRS

If you’re serious about overcoming a gambling addiction, then self-exclusion from further credit is a wise way to go as it removes the temptation of borrowing money for the sole purpose of gambling. The VRS allows you to self-exclude on a larger scale. Rather than contacting companies individually, you just register once, select the option to be automatically declined credit and all companies who use the service will know not to grant you further credit.

4) The Gambling Commission

You’ll find more excellent resources when you visit The Gambling Commission website. They list a number of organisations who offer anything from debt advice through to emotional support for people affected by gambling addiction. They also talk about the benefits of self-exclusion.

5) Gamblers Anonymous

It often helps to know that you’re not alone and to talk about your gambling problem with other people who have been through the same. Gamblers Anonymous run meetings around the country and you can find a meeting local to you on their website.

Whether you have a gambling problem yourself or you know someone who does, we hope you’ll find these resources helpful. If you do know someone who would benefit from this list then please do share it – and if you’re looking for other ways to help, why not take a look at our blog post on 5 Ways to help someone with a gambling problem.

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5 Ways to help someone with a gambling problem

According to the Gambling Commission, people in Great Britain spent around £14.5 billion on gambling between October 2017 to September 2018. That includes anything from buying a weekly lottery ticket to betting on sports or going to a casino.

Most people enjoy the odd flutter as a bit of fun, but for some, gambling becomes an addiction which can lead to debt, family break-ups and even death. Liz Ritchie, from the charity, Gambling with Lives has said that ‘there are 250-650 gambling related suicides per year in the UK’.

So, how can you help someone with a gambling problem? In this post we want to share some simple, practical tips…

1) Open communication

It’s amazing how powerful an open, supportive conversation can be. If you know someone with a gambling problem, then trying to talk to them calmly about what’s happening. Avoid confrontation or judgment, but instead give them an opportunity to share what’s going on and let them know that you’re there to help.

These types of conversations can be the most important first step to recovery because if someone can’t see that they have a problem, they’ll never seek help to change it.

2) Suggest Cognitive Behavioural Therapy (CBT)

Evidence has shown that CBT can be an effective treatment to help people overcome their addiction to gambling. It usually involves weekly sessions with a therapist where they’ll look at thoughts and behaviours that may be causing or contributing to the gambling addiction. Then, the therapist will work together with the patient to create a plan to change these thoughts and behaviours in order to develop healthier habits.

3) Encourage them to hand over control of their finances

This can be difficult, but someone with a gambling problem is likely to have problems prioritising where their money goes. Gambling addicts often have severe debt problems which in turn can lead to issues with their relationships, job, mental health and more.

4) Tell them about resources like the VRS

We are here to help people take control of their money when they’re going through a period of financial vulnerability and no one is more financially vulnerable than someone with a gambling problem. By registering with the VRS, people have the option to ask companies to decline their credit applications until they feel ready to take back the reins.

GamCare is another great resource. They offer confidential advice, group chats and further information on how people can self-exclude themselves from gambling operators.

5) Support them

If you’ve helped someone with a gambling addiction to admit they have a problem and to seek treatment for it – well done! Now begins the work of helping them through as they try to break the addiction. There are a few ways that you can do this:

Keep them busy

With any addict, it’s the unstructured time that is the most dangerous. Help the person to schedule their time and stay busy to avoid temptation.

Introduce them to new hobbies

What better way to take someone’s mind off gambling than encouraging them to try something new? A new hobby or interest can not only distract, but can even help to boost someone’s confidence and self-esteem.

We hope these tips have helped – and we’ll leave you with one last important piece of advice…

Make sure you take care of yourself too.

It can be very stressful to know someone with a gambling problem, especially if they’re part of your immediate family or close circle of friends. It’s great to support that person, but make sure it’s not to the detriment of your own physical or mental wellbeing.

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Vulnerability implications of the increase in the self-employed

Recent Office of National Statistics (ONS) employment figures showed the rise in the number of self employed people in the last year was greater than the rise in the number of employed people (an annual rise of 195,000 to September, compared with 110,000 employed people). The proportion of all workers who are self-employed is now at 15.1 per cent. For most self-employed people, it can provide increased freedom, control and flexibility, and self-employment and small business ownership plays a crucial role in driving forward our economy.

However, while many of these businesses or individuals are able to flourish, for others it is less straightforward. The reality is that the growing number of self-employed people also means that there is a growing number of people who are potentially earning less, not paying enough into their pension and experiencing cash flow issues that could put them at risk of high levels of debt – the vulnerable self-employed. They are also missing out on employee benefits such as holiday and sick pay, life insurance and income protection. The financial vulnerability of this growing group of workers is an area of concern, and they are a group that the VRS feels particularly well positioned to help, given the flexibility of the register and the ability to add, and remove, yourself as necessary.

Should you, or someone you know be self-employed and facing debt or other financial concerns, the VRS can help you to find some support whilst you need it. As you are able to sign up as and when you require the register, with no impact on your credit rating and no cost to you to do so, it can be a useful source of protection in more challenging times, whilst allowing you to flourish when times are good.

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Support for our Armed Forces community

On this day, Armistice Day, it feels particularly poignant for us at the VRS to pay tribute to the selfless and heroic role that our veterans have played in keeping our country safe. We value the sacrifices that have been made, and remain constantly grateful for their contribution to our security. The VRS believes that veterans should be supported in every way necessary in recognition of this, and hope that the voluntary register, which is free to sign up to, can be one route to achieving this support.

We are aware that there are a number of veterans who struggle with financial vulnerability, or mental or physical health issues which may also impact on their financial affairs. For example, the Defence Select Committee published a report last year which said that cuurent research suggests that the number of veterans with mental health conditions that require professional help could be around 10%.

For this reason, we are honoured to be working alongside Veterans’ Gateway, a fantastic organisation that provides a first point of contact for veterans seeking support, and hope that the service we offer will be able to be of use for some of the people that they advise. Veterans’ Gateway have reported that finance is continually in the top three areas of need, though frequently in combination with another issue, for those using their service. Members of the Armed Forces community can encounter many of the same financial issues as the general population, for non-Service related reasons, but Service life, often starting in very early adulthood, can leave them uniquely financially underprepared.

A recent government consultation, The Strategy for our Veterans, spoke of the need for improved collaboration between organisations in order to offer veterans coherent support, which is the essence of what the VRS are hoping to do. It noted that veterans receiving support from many different organisations often have to repeat their circumstances and historic experiences to each new provider, which can be frustrating for the individual and inefficient for the organisations concerned.

If you know a Veteran who might benefit from contact with the Veterans’ Gateway, or the service that the VRS provide to support the financially vulnerable, we would strongly encourage you to put them in touch. Details about contacting the VRS can be found here.

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VRS Power of Attorney

Planning ahead with a Power of Attorney: don’t wait until it is too late

No one wants to think about what would happen if they lost mental capacity and could no longer manage their affairs. But many people don’t realise that if you don’t appoint someone to have power of attorney when you are mentally and physically capable to do so, it could potentially mean a complete stranger will one day make decisions regarding your future. At best, your preferred representative will have a more complicated and time-consuming struggle to ensure that they can take responsibility for making decisions in your best interests. One of the most common misconceptions around this area is that people assume there is an automatic right for their spouse, or next of kin, to make decisions on their behalf, and deal with their bank accounts and pensions for example, if they are no longer able to do so, but this is not the case.

Everyone knows that we should write a Will, but too few people know that it is also important to consider a Lasting Power of Attorney (LPA). This means choosing another individual, who can be anyone you believe to be appropriate, and giving them the legal authority to look after specific aspects of your financial affairs, or health and welfare, should you lose the capacity to do so. It ensures that even with a mentally debilitating illness, you can feel that you are keeping control by being the person to decide who will take future decisions for you.

It is a depressing statistic, but one that we all need to bear in mind, that by 2025 more than one million people in the UK will have dementia, according to the Alzheimer’s Society. One in five people over 85 already suffers from it, and apparently one person in the UK develops dementia every three minutes. In situations like this, handling your financial affairs becomes impossible, and you need to have decided upon the best person to take decisions on your behalf before it is too late to do so and you are deemed mentally incapacitated.

For, should you fail to do so and there come a time in the future when you don’t have the ability to make or communicate your own decisions, but you haven’t created a LPA, it may be necessary for the Court of Protection to become involved, as only a mentally competent individual can appoint a Power of Attorney for themselves. If you have not done so in time, then the Court can appoint someone to be your deputy, but their powers are very limited compared to someone who has Power of Attorney, it takes time for this to be processed, and there is an annual cost to renew a deputyship.

Once someone holds a Power of Attorney, the VRS are on hand to help them with alerting financial institutions to the circumstances of the individual as and when required, to ensure they are treated appropriately. You can read more information on our website about the process, and the various steps to take, here.

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A secure point of reference for vulnerable consumers and organisations they deal with

CCR magazine have an article this month about the VRS and the success of the recent launch event, as well as flagging the polling conducted by ComRes. The article describes the register as a ‘secure point of reference for vulnerable customers ‘, and notes that the VRS gives organisations dealing with vulnerable people a tool to help them meet their regulatory and ethical obligations in dealing with vulnerable consumers and to make the best possible decisions while doing so. You can read the article in full on p9 here: http://www.ccrmagazine.com/magazine/october-2019/.

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VRS evidence to the Lords Gambling Industry Committee

The House of Lords Gambling Industry Committee was appointed in June 2019 to consider the social and economic impact of the gambling industry. They published a call for evidence to look at how effective the current gambling act is at protecting vulnerable people from being harmed by gambling, and whether sufficient services are available for the support of people who are harmed by gambling, among other issues. The VRS responded to this call for evidence, and, among with other stakeholders, their submission has recently been published and can be read here. The Committee is now considering the evidence it has received, and is due to report by 31 March 2020.

The VRS submission looks at the way in which the VRS can work with in partnership with the ‘GAMSTOP’ initiative to help gambling companies identify vulnerable consumers and support them appropriately. It suggests that this could include a closed user group for online gambling companies and their clients, should that be considered a preferable way forward.

The VRS will follow the progress of the Committee with interest, and look forward to receiving the recommendations.

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Synectics partnership is a significant step in the VRS story

The news last week that Synectics Solutions was partnering with the VRS, and would be using the register to allow their clients to conduct vulnerability searches, was a huge boost to the VRS and a sign of the speed at which the VRS is starting to grow and receive recognition from the largest corporates in the data management space.

Synectics Solutions is one of the UK’s biggest data management and software development companies, providing financial crime, fraud prevention and information analysis services. For almost a quarter of a century they have led the technological revolution in and around sharing data and data syndication, and have given data-led intelligence to their global customers to allow them to make informed decisions. The fact that the register now sits within their solutions that their clients can access means that the reach of the VRS extends to a far larger range of organisations, ranging from the best known banks through to the biggest insurance companies and everything in between.

They pride themselves on being incredibly successful in reducing risk, combating fraud and financial crime and enabling public and private sector organisations to meet their regulatory commitments, and we are delighted that they have made the decision to work with the VRS. They are of the view that the VRS enables Synectics to evolve appropriately to meet the increasing need to recognise vulnerability, and allows them to provide the best possible solutions to help businesses treat customers fairly and compassionately.

We would encourage other like-minded organisations to work with us to really help transform the quality of life and peace of mind of vulnerable customers.

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