Ask Áine: My hours have been cut – how can I learn to manage my money?
I was recently told that my hours are going to be temporarily cut and am worried about how I am going to manage.
As it stands, I am just managing from one pay packet to the next, and I often have to dip into my overdraft to see me through the last week before payday. If I don't get a handle on my expenses I'm worried that I am going to sink further and further into debt. How can I manage money better?
You are not alone in running out of money in the run-up to pay day – many of us to do it and sometimes it can take a change in circumstances – in your case reduced hours – to force us to take a hard look at our finances.
Setting out, and sticking to, a realistic budget is important, no matter how much you earn. Whilst it can be daunting at first, there are many tools available to help you identify exactly what you are spending your money on and where changes can be made, including a dedicated budget planner on www.consumerhelp.ie.
Add in all the money that you receive or are paid over a given time period, including salary, any social welfare allowances if applicable. Then consider what regular payments you are making, such as rent or mortgage payments, phone, heating, electricity etc.
If you are not sure how much you are spending on everyday items, it is a good idea to track your spending over a week to help you identify what you spend your money on. Keep receipts for every item you buy and enter the costs in a weekly diary.
If you work out your budget and discover you are spending more than you are earning, try not to despair – the next step is to look at each expense to see what can be reduced or perhaps even discarded.
If you have never done a budget before, starting is the hardest part. However, you will find that it gets easier, and it can become second nature. Being in control of your money will mean you are less stressed and you will be in a better position to manage, week to week and month to month.