With winter approaching, preparing your monthly budget, that’s if you have one, for winter is necessary. Winter months have their own set of unique expenses that consumers usually do not account for. With inflation at an all time high, there are a number of items that are more expensive than they used to be. Your goal is to be prepared and take into account these new budget items.

Start Tracking A Proper Budget

Having a good, solid budget is crucial to ensure that you are able to cover your expenses, maintain your debt repayments and save. If you are looking for a budget split, our favourite and widely used budget method is the 50/30/20 budget split. If you already have a budget, great! But there is always room for improvement. 

Assess Your Current Budget & Change If Necessary 

Assessing  your budget is important when approaching the winter months. When going through your budget, there may be a few unnecessary or luxurious expenses you can reduce or cut. Having a rough estimate of how much you are going to spend additionally each month can also assist you in ensuring that your funds are going towards the right things. 

For example, in winter you will probably use more electricity to power heaters or use more hot water than usual. Wood for fires and more boiling of the kettle are also items that tend to increase over the colder months. Additionally, you may have increased expenses for food, clothing and shoes and transportation. These are all additional expenses you may not have accounted for in the winter months. 

We have also provided you with some additional expenses that can be forgotten such as the following:

1. Electricity (lights are on for longer, geyser working overtime, increased stove and oven use)
2. Water (more hot water is used, boiling of food)
3. Gas (usage of heaters or gas stoves is increased)
4. Food (warmer food and hot meals)
5. Clothing & Shoes (the need for thick, warm jackets, under garments and boots)
6. Transportation (increased travel time due to wet conditions)
7. Blankets and bedding 

Try Avoid Using Debt To Cover Expenses

Using debt to cover budget expenses can lead you to fall into more debt, or even a debt cycle. Therefore, it is important that you try to avoid debt in these situations. Opening a savings account into which you can deposit some funds each month can help to cover some additional or unexpected expenses that may arise.

If you do need to utilise debt in the case of an emergency or unexpected event, try to repay it as soon as possible. Missing payments can negatively impact your credit score and credit availability. Additionally, credit providers are able to issue defaults and judgements against your accounts. This can cause your credit score to worsen and hinder your ability to obtain credit in the future.

If You Have Used Too Much Debt, What Can You Do? 

If you have utilised too much credit and you are being turned away from taking out any additional credit. This likely means that your credit score is too low and your credit history has been affected. If you are struggling to repay your debt and stick to your payments, you should look at consolidation options. These processes allow you to consolidate your debt into one reduced monthly instalment. 

If you are struggling to stick to your payments, contact us and one of our debt experts will take you through a free assessment.