We all want to make the most out of our finances, but it is difficult to know how to make your money go further. As a result of COVID-19, many people across Northern Ireland are struggling financially. At EG Accountancy, we ensure our customers make the most of their money. Therefore, we have compiled a short guide to personal budgeting in Cookstown, to maximise your savings and identify where you can spend.
Since the COVID-19 pandemic began in 2020, the UK has faced serious financial turmoil. As well as this, the Ukraine-Russia War has strained our economy, becoming the largest contributor to inflation. The inflation rate is currently the highest it has been in over 40 years, at 10.1%. This means that everyday essentials such as energy bills and petrol have skyrocketed – prices have almost tripled in some areas.
So, why should you prioritise personal budgeting?
The best way to regain control over your finances in Cookstown is to start investing time into budgeting. There is a range of benefits of personal budgeting:
- You are less likely to fall into debt
- You have more control over unexpected costs. As we know from the last two years, unforeseen circumstances can creep up on us at any time, and it is difficult to prepare for these. Therefore, by budgeting effectively, you will develop a ‘safety net’ in case of unexpected costs.
- You are more likely to be accepted for mortgages and loans. This is because budgeting improves your credit rating, which is a measure used by lenders to decide whether you are eligible for mortgages and other loans. A good credit score tells lenders that you are more likely to pay your loans back on time.
- Budgeting allows you to make more savings. This means that you can develop savings for a new car, a holiday, or whatever you are aiming towards.
Where do I start with my personal budgeting in Cookstown?
If you are beginning to invest more time in your personal budgeting, it is best to start small. This is very simple. For example, choosing to make lunch at home to avoid going out for an expensive lunch, or choosing to walk to a friend’s house to save petrol.
As well as this, you must be aware of what you are entitled to. Using an entitlement calculator, you will identify exactly how much money you will receive from the Government. This is affected by personal factors, including:
- Where you live
- Age and disability
- Net income
- Housing costs
- Council tax
- Benefits you currently receive
As a result of the economic downturn and the increased cost of living, the Northern Irish Government has implemented a one-off Cost of Living payment for those on income-related benefits. The main goal of these payments is to assist with the increased cost of living, which has affected many Northern Irish citizens in recent months.
Keep on top of your taxes when budgeting
Taxes can be a financial burden. There are several types of tax you are required to pay if you live in the UK. Firstly, those who are employed must pay income tax. Most people have a personal allowance, dictating what you must earn before HMRC charges income tax. However, if you are above this threshold you must pay a predetermined amount. This is dependent on your income.
Ensure you are on the correct tax code when
The tax code you are on is determined by your employer or pension to calculate how much Income Tax you are required to pay. This tax code is dictated to your employer/pension by HMRC.
It is important to ensure that you are on the correct tax code, as you can be over or undercharged if HMRC has incorrect details on your employment status. If you are on an incorrect tax code and therefore being overcharged, you are owed a tax refund. To receive the payment, you must apply for a tax refund.
EG Accountancy can help with your personal budgeting
At EG Accountancy, we have a wealth of knowledge and experience to assist you with your finances, particularly with budgeting and tax planning. We offer a 1:1 ‘Power Hour’ service. This allows you to gain clarity from a professional, and gather all the tools you need to organise your personal budgeting in Cookstown.
As well as this, we have an extensive range of knowledge of the UK tax system. Due to its complexity, the UK’s tax system is extremely daunting and can be difficult to navigate. Therefore, we offer a range of expertise on the issue of taxes. This ensures you are making the most of any available allowances, and not paying any more tax than is necessary.