In today’s economy, people are now finding it harder to manage their finances. As a result, more people in the UK are falling into more debt.  Budgeting isn’t something that’s fun, but its something more and more people are learning how to do.  At the end of the day, you simply can’t spend more than you make, at least not in the long term.  No longer can the United Kingdom go on living on credit cards and personal loans.

The first step to budgeting is figuring out your current expenses. Use an online worksheet or notebook to keep track of everything your spending over a month or so. Go through all your receipts and and credit card statements. Jot down all your expenses and you will have a pretty good idea of what your spending your money on.

When you have tallied up your expenses you should then go through your wages and calculate your what you earn in an average month.

Once you know your income and expenditure you need to work out how much you need to spend per month to get by.  Figure out which of your expenses are necessary and which expenses are unnecessary. As far as actual needs go, there are very few.  Essentials include food, shelter and clothing. Most other things are wants.

Once you’re on your way to developing an effective budget, you need to keep track of things weekly to see if you’re going off budget and where you need to cut back.  For example, many people are spending a lot more on food than they need. There are many ways to cut the food budget without giving up quality.  Many stores reduce their products on a cycle.  The Internet is your friend when it comes to this.  Go online and decide what you need then check the best deals.

You will also need to look at your loans, credit cards and any other debt you have. Focus on paying off the debt with the highest interest rate and avoid minimum payments.  If you have a good credit rating, a good idea may be to transfer all your debt onto a 0% interest credit card. The amount can then be paid off faster.

Another way to budget effectively and save money is to cut out all those extra little costs.  Do you need a full satellite TV package?  Dropping to the basic TV package could save you around £40 per month.

Clothes can be very expensive nowadays, especially if you like your designer labels.  To save money you should check out end-of-season sales that offer discounts, as retailers make room for the new season’s items. If you can prepare and plan your shopping sprees with these seasonal trends, you can save a lot of money over a year.

Another way to cut down on your monthly expenses is to dust of your old insurance policy’s that you let renew year after year.  Whether it be car insurance, home insurance or life insurance there’s great deals out there, especially if you have built up a no claims discount.  So when your policy’s up, don’t just let it renew.  You should shop around and get the best rates.  If you are happy with your current insurer and want to stick with them, there’s absolutely no harm in getting other quotes so you can negotiate a better deal with your current insurer.

Successful budgeting takes persistence and dedication, so you have to be prepared to be disciplined.

Oh, and don’t forget an emergency fund. This will go a long way to keeping you out of debt should the unexpected happen.  In this fragile economic period, we need to prepare for the unexpected.  Put a little aside each month for a rainy day.

Figures show that Mortgage lending in the United Kingdom fell in June compared with July’s figures.

The British Bankers’ Association said that he number of mortgages that where approved for house purchases fell to just under 35 thousand in June

The drop in mortgage lending came despite the abolition of Home Information Packs.

It was reported that the number of people selling their houses were rising but a dip in future demand from buyers is predicted. The BBA said that the number of home loans approved for house purchases was down from 36,418 in May and the lowest level since February.

The abolition of Hips was expected to encourage activity in the market, though this may be limited due to the uncertainty over job security.

A Bank of England report warned that mortgage lending might fall in the next three months as lenders fear they may not be able to raise as much money as they need in the wholesale financial markets.

However, Martin Gahbauer from the Nationwide building society believes the recent price developments should no longer be seen as a blip.

“After seven consecutive months of rises, a stabilisation trend has been established, but I see prices flattening out, with prices by December 2010 about the same as now,”

Most first time buyers still need a 25% deposit in order to get a new mortgage deal and this is stopping many people getting on the property ladder.

The average property price for a first-time buyer in is 10% lower in 2010 than in the same period in 2008 with the average deposit paid by a first-time buyer being around £30k

Many first-time buyers come up with these deposits with the help of their parents but many do not have that luxury.  The average age of first-time buyers now stands at 31 and is expected to increase as many still cant get their foot on the property ladder.

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