IVA survival - reducing expenditure
Reducing outgoings makes for greater opportunities. How to stretch your income further with careful budgeting.
One of the common themes of the stories from those who have undertaken an IVA is the need to live within a stricter budget. This involves care in where our money goes. In order t qualify for an IVA in the first place, some cost-cutting may be necessary. And if any drop in income during ab IVA might jeopardise the IVA, then making savings may be necessary ti ensure that the IVA payments remain affordable.
1) Policy renewals – each year some policy or other needs renewing – car insurance, home insurance, breakdown cover, utility supplies etc. And very often savings can be made by simply shopping around – and sometimes the savings involved can be very large. When we receive notification of the annual renewal (or even before) it’s worth spending an hour or 2 doing some homework. The potential benefits can be significant. And then there is for some, the mortgage renewal which is a factor to consider and its impact on the affordability of the IVA.
2) Become a better shopper – if we have to cut down on spending habits because we are in an IVA with a more limited budget, then shopping around makes good sense. And there is an extraordinary amount of variety when it comes to pricing the same product. One supermarket may be cheaper overall, but individual items may be cheaper elsewhere. Of course, we have limited time and some comparisons could cost more in travel than the savings gained, but it can certainly pay dividends by shopping smartly. Looking at the offers sections or getting a feel for when items are reduced, can help. And apps are available such as mySupermarket that can provide useful comparative information.
3) Budgeting effectively – it almost goes without saying that learning to live on a realistic budget is fundamental to surviving an IVA. And that may well mean taking very practical steps to understand where our money goes. Listing every penny spent for a month may reveal some unexpected results. As one of our contributors mentioned – even physically putting budgeted funds in envelopes could work. Understanding our priorities is vital – and being able to save for expenses that are hard to predict – the visit to the dentist, the car servicing etc.
4) Careful planning – meaning we are in control of the outgoings. We know how much we have to last the week or month. Making a shopping list so we know what we need and can avoid unnecessary waste or forward planning for the next school uniform or car service. It’s true – we can’t predict what will happen next, but we can at least make some plans for the known, the possibilities and the completely unexpected.
5) Coupons/vouchers – there are bargains to be had if we keep our eyes open and dig around a bit. Sales time is a good time for the necessary purchase, but increasingly there are “sales-type” opportunities at every turn by scouring the internet for deals. Money Supermarket is a regular source of potential bargains, and one of our contributors highlighted the Martin Lewis (he of the Money