Clarence Place Wealth Management Ltd

There have been a lot of reports lately about the rising cost of living, in particular increases in the price of fuel, gas and electricity.

Sudden changes to our outgoings can be scary – trying to find extra money each month can mean you end up eating into your savings or falling into debt.

This is why it’s even more important than ever to make room in your budget for these potential increases and, where possible, create a savings pot specifically for unexpected spending so you can stay in control.

When putting a budget together, look closely at bills that could rise and charges that are most likely to change. Factor in annual increases for services such as Wi-Fi or TV subscriptions and put extra aside for increases in energy bills and food costs. To try to ease the pressure of rising prices, you could also look at where you can make savings straight away. Small changes such as switching suppliers, swapping branded food items for supermarket own and cutting back on subscriptions that you're not making the most of can help reduce your spending.

What are you subscribing to?

Subscription services seem to be everywhere at the minute. All kinds of products and services such as TV channels, music, mobile phone apps, magazines and memberships to clubs, entertainment venues or even food and beauty products are now offered on a subscription basis. It’s a popular option for companies, but it can be hard to remember what you’ve signed up to.

This is why it’s vital to budget or take time to look through your bank statement each month. Even if the subscription is only for a small amount of money, it can soon add up, and you may not be getting as much value as you think you are from signing up. Take a look at your subscriptions and for each one, ask yourself if you’re really using it enough to justify it and check whether it’s good value for money. If you’re starting a new subscription, make sure you’re checking the terms and conditions so that you know when and how to cancel.

For budgets to work well, they need to be working documents. If you don’t factor in changes to your spending, however big or small, it can easily derail your savings plans. Spend a little time each month double-checking that you’ve accounted for everything and added anything new.

Budgeting is a great way to take control of your money as you know exactly what’s coming in and out, but reviewing it is just as important. Just because you have one in place, doesn’t mean it’s working for you or that it’s up to date, and it could mean you’re spending money you don’t have.

With increases in the cost of energy bills, food and other essentials, it’s worth spending time to update your budget now. There are also lots of other reasons why your budget might need altering that you may not have thought about, such as changes to your lifestyle or family. A child starting school, for example, could mean cheaper childcare bills, but have you also considered other expenses such as school uniforms and trips? A new job is likely to come with salary changes but could also affect what you’re spending on travel or lunches.

Things like a change in eating habits, a new hobby or even just going out to eat more (or less) than you used to can make a big difference, so it’s worth checking you’ve accounted for everything accurately every few months. It’s also a great opportunity to see if there’s anything you can cut out or swap to save more.

Have you booked a holiday recently? People often remember to budget for the cost of the trip, but are you factoring in all the other holiday spending, too? It’s easy to forget things like buying food at the airport, petrol, taxis or transfers, eating out more, replacing holiday clothes or even just sun cream or insect repellent. All these small costs add up, and if you haven’t factored them in, it can be easy to overspend. Make sure you include as much as you can in your budget.

If you’re heading off on holiday soon, here’s a reminder of our top tips for managing your holiday spending:

- Set a budget before you go and try to stick to it as much as possible
- Make sure your budget is realistic
- Plan ahead for activities – tourist attractions often offer discounts if you book trips ahead of time or choose certain days
- Check airline and hotel or accommodation policies carefully to ensure you’ve factored in any extra charges
- Don’t forget to include hire car or other travel costs
- If you’re going abroad, shop ahead for the best exchange rates

What does your future look like? Do you have a plan for retirement or any big life goals for the next 20 or 30 years? If so, do you know how you will afford them or how much they are likely to cost? You are more likely to achieve your long-term goals if you properly plan for them.

Regularly reviewing your statements or online banking app is an important part of money management. Not only will it ensure you pick up on any errors quickly, but it will also help you see if there are any savings to be made. Whether it’s a forgotten subscription you don’t use or you’re spending far more on eating out than you realised, a quick check over your purchases each month can help you stay in control.

Do you know where your pensions are? If you’ve changed jobs a few times and haven’t moved your pensions, the likelihood is that you have different pension pots in different places. If this is you, and you’re not sure what you have, take some time to track them. Once you have, keep a list of all the details you may need.

Many people know of trusts as a mechanism for reducing Inheritance Tax, but trust and estate planning can also be helpful for other reasons. Trusts, in particular discretionary trusts, can offer protection for your assets against a number of different changes in circumstances. If you are considering gifting assets in the future, it may be worth exploring whether a Trust could be an option for you.

Please note that trusts are not regulated by the Financial Conduct Authority