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The Independent
11 hours ago
- Business
- The Independent
7 essential budgeting hacks for parents
Between high inflation pushing up the cost of everything, expensive (and rising) childcare prices and pressures to plan financially for an uncertain future, parenting is pricy right now. 'As a father of two young children, I know first-hand how costs for looking after the kids can quickly add up,' says Rajan Lakhani, personal finance expert and head of money at smart money app Plum. 'It's understandable that working families with children of all ages are really feeling the pinch, more so than ever before. While the latest inflation reading was 3.4%, the overall impact of inflation since 2021 means prices have risen by 25% overall, which is a major increase on our day-to-day finances.' Lakhani says all is not lost though and with some budgeting hacks, parents can cut costs and even have more in their pocket for spending or saving. 1. Commit to a quarterly spending review 'Firstly, you need to go through your finances and check what's really needed and to see if you're getting the best deals on things like insurance, mobile phone contracts and streaming packages,' says Lakhani. 'It can be really hard to find the time to manage your money alongside family life, so make it part of your routine to set aside some time each month to review your finances, pay any bills and create your budget. Do it on a day where you know you won't get interrupted and can give it your full attention. It is also helpful to have a yearly overview of your finances, he adds. 'You can easily review a whole year's worth of bank statements to check, or use an app to secure a good overview of your spending so you can see where your biggest outlays are. You want to get a sense of when in the year you spend more (e.g. Christmas) or have a higher income (e.g. due a tax rebate). This will help you plan your budget accordingly and not have any unpleasant surprises.' 2. Check your bills quarterly to make sure you are truly getting the best deal Broadband, electricity and gas are some of the most common bills that people forget to switch and compare, Lakhani says. 'It's estimated that consumers are losing up to £291 per year by not switching. 'It's advised that you review your energy provider as a matter of habit every 12-18 months, prepare for when your broadband contract ends and make sure you're comparing deals well in advance so you're ready to switch when the contract does come to an end. 3. Save money with pre-loved items 'If you have children you'll know how fast they grow and how quickly their interests change year to year, this is why it's better to embrace pre-loved clothing, books, and toys,' Lakhani advises. Try charity shops, eBay, Vinted and Facebook Marketplace. YoungPlanet, Rascal Babies and Mum2Mum Market are great places to find good quality, pre-loved items for very young children and babies. 4. Take advantage of special family deals and vouchers for days out Loyalty cards and railcards will often have family days out offers on their website or app for cardholders, he points out. 'For example, with a railcard you can occasionally get 2for1 deals on 'days out' to the zoo and the aquarium, as well as discounted cinema and theatre tickets. And when it comes to the travel itself, railcards often quickly pay back your initial costs. 'Some supermarket point schemes offer discounts on meals out, streaming services, holidays and more. 'And remember – one of the biggest costs of a day out are meals and refreshments. Avoid high prices by taking food and drink with you, as long as this is permitted. Check with your local council for free events too, many of these have no fees, he says. 'Events will often be at the local library, such as reading challenges and toddler groups, where you can often take advantage of free broadband while the kids immerse themselves in books.' 5. Teach older children about budgeting When you go on holiday, consider giving your teens a small allowance to spend, suggests Lakhani. 'This will help them to make their own decisions, take responsibility for money and learn how to stay within a budget. Even if they splurge it on just a couple of items quickly, it's an opportunity for them to learn so don't reprimand them. Just make sure to stay strong-willed and not give them any extra, otherwise you're reinforcing the wrong behaviours.' 6. Check for uniform grants worth £150 Fiona Peake, personal finance expert at Ocean Finance, says: 'Many councils offer uniform grants, especially for families on low incomes, benefits, or with multiple children starting school. These are usually one-off payments made in summer and can help with essentials like branded jumpers, school shoes or PE kit. But the support is rarely advertised, and some parents are missing out on over £150 per child. Check your council's website or speak to your child's school directly.' Also check with your school to see if they offer a recycled uniform scheme. 7. Take advantage of childcare savings Outside of your mortgage or rental costs, your childcare spending will be among your highest outlays, Lakhani points out – and UK costs are among the highest in Europe. But there are various tax breaks available which could take a big difference. The government offers tax-free childcare to parents with annual salaries up to £100,000. 'If you're paying for things like breakfast clubs, after-school care or holiday clubs, you could get a 25% top-up from the government,' says Peake. 'For every £8 you pay in, they add £2 – up to £500 every three months, or £1,000 if your child is disabled. It's open to parents working at least 16 hours per week, with children under 12 (or under 16 if they have a disability). Around 800,000 eligible families aren't claiming it, so it's worth checking at 'Working parents on Universal Credit can claim back up to 85% of childcare costs, even during school holidays. This often works out better than Tax-Free Childcare, especially for larger families,' she adds. It works out to a maximum of £1,032 for one child and £1,769 for two or more children – for children up to the age of 16.' You can get up to 30 funded hours of childcare a week if you have a three or four-year old (or from nine months old in England). Parents could work together to share childcare too, says Lakhani. If you know someone with a schedule that fits in with your childcare needs – and vice versa – you could think about looking after each other's children, if you trust them.
The Sun
5 days ago
- Business
- The Sun
How to save £5k even if you're on a low income earning £25k a year – it's all about the 50-30-20 rule
SETTING aside money can feel like an impossible task right now as bills and food costs climb higher and higher. But even very small amounts can add up over time, and there's things you can do to help you start saving even if you're on a lower than average salary. 1 The Sun has chatted to Plum's personal finance expert Rajan Lakhani about how you can start saving on a salary of around £25,000. Here's what he said… Work out how much you can afford to save The first step you should take is to sit down and work out what's affordable for you to save. You might want to do this manually by listing all your incomings - such as your salary and any benefits you receive - and then all your outgoings, such as rent, bills and average food costs. From here you can work out how much you have left over per month. Alternatively you can use an app like Plum which connects to your bank account and can calculate how much you can afford to save based on your outgoings. Rajan says most people are surprised by how much they can save, but you shouldn't be put off if you can only afford to set aside £5 or £10 a month for now. 'That might not sound like a huge amount but that money will build, particularly if it's earning interest,' he says. 'It's really important just to take that first step and then see what you can do.' Reduce your spending If you want to give your savings an extra boost, you should look at where you can cut costs. Switch bank accounts for free perks Many people saw their bills rise in April but there are some ways you can reduce the costs of essentials. For example, you should use price comparison websites to look for better deals on your mobile phone, broadband and energy bills. Of course you'll need to take into account any exit fees if you currently have a contract with a provider. 'A lot of these organisations are relying on you not taking any action and just simply renewing. "And actually, it really, really does pay to have a look, compare the markets, compare the different prices,' Rajan says. 'If you really want to stay with your provider, there's no harm in giving them a call and saying 'look I found this deal, I might switch to it, what's the best offer that you can give me'.' You should also do a sweep of your subscriptions to make sure you aren't signed up to anything you're not using. Another option to save money is to sign up to as many loyalty schemes as you can - if you're happy with shops using your data. You can often get cheaper prices or build up points to spend in stores when you sign up to shopping loyalty schemes, such as Tesco's ClubCard or the Boots Advantage Card. Check if you can get any benefits You could give your income a boost by taking advantage of any benefits you're eligible for from the Government. For example, lots of parents are unaware of the benefits available to them such as 30 hours of free childcare, Child Benefit, and extra Universal Credit payments. If you're married, you can get Marriage Tax Allowance which could help you reduce the amount of tax you pay. By cutting your outgoings and boosting your income, that can give you more breathing space to save extra. Have an emergency fund in place If you're earning around £25,000, it's really important to have an emergency fund to fall back on in case you have an unexpected big expense or you lose your job. Experts typically recommend you have about three to six months worth of your salary set aside. So if you're on £25,000, this would work out at between £5,316 to £10,632 after tax. This emergency fund should be in an easy access savings account so you can get it quickly if you need to. Rajan says it's better to have this money in cash savings rather than invested as you want your money to be secure in case you need to dip into it. He recommends looking for savings accounts that have interest rates above 4% currently as these will give you a decent return on your savings. How much should you aim to save? Exactly how much you can save will depend on factors like your outgoings, your lifestyle and whether you have children or not. Rajan says a ballpark figure you can use is the 50-30-20 rule. This means spending 50% on your 'needs' like housing costs and bills, 30% on your 'wants' like clothes and entertainment, and 20% on your savings. So if your take-home pay is £1,772.58 per month, you can expect to spend £886.29 on your 'needs'. Then you would spend £590.86 on your 'wants' and save away £354.52 per month. However, Rajan says saving 20% of your salary can seem like a 'large figure' and whether that's possible depends on your circumstances. For example, households have seen expenses like rent, energy bills, council tax and water bills increase recently. 'For a lot of people, 20% will be very difficult to put aside. "Having that 20% ambition can encourage you to save more but it depends on your circumstances and what works for you,' he says. 'The key thing is just to start giving saving a go and you may be surprised by how much you are able to set aside.' Small ways you can save If you're not sure how to start saving, Rajan recommends using apps to automate setting money aside for you. Plum has a round-up feature that rounds up every purchase you make to the nearest pound and then saves away the extra money. So if you've bought something for £1.60, the app will automatically save 40p for you. Another feature you can try is the rainy day rule, which sets money aside whenever there's a day it rains in the UK. Or there's the 1p Challenge, which starts off by saving 1p on your first day and then sets aside a penny more every day. It means you'll save up to £667.95 over the course of a year. SAVING ACCOUNT TYPES THERE are four types of savings accounts: fixed, notice, easy access, and regular savers. Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free. But we've rounded up the main types of conventional savings accounts below. FIXED-RATE A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term. This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account. Some providers give the option to withdraw, but it comes with a hefty fee. NOTICE Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash. These accounts don't lock your cash away for as long as a typical fixed bond account. You'll need to give advance notice to your bank - up to 180 days in some cases - before you can make a withdrawal or you'll lose the interest. EASY-ACCESS An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals. These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee. REGULAR SAVER These accounts pay some of the best returns as long as you pay in a set amount each month. You'll usually need to hold a current account with providers to access the best rates. However, if you have a lot of money to save, these accounts often come with monthly deposit limits. How to put your savings to work Once you've started saving, you should make sure you get the most out of your money. That means helping it grow by either putting it in a savings account where you are receiving interest above the rate of inflation, or investing it. For reference, the current inflation rate is 3.5%. Rajan says you can get better interest rates by putting your money into a fixed-term savings account - but you should make sure you have an emergency fund set aside first for any immediate expenses. If you lock away your money into a fixed account, your interest rate will typically be higher than with an easy access account. You should also shop around for the best rates. Often online-only banks offer higher rates as they have fewer costs, but you should check they are registered with the Financial Conduct Authority and that your money would be protected by the Financial Services Compensation Scheme. Rajan also recommends looking at ISA accounts as you'll be able to earn interest on your savings tax-free up to £20,000 per tax year. Plus, the interest rates on Cash ISAs are some of the highest available right now. Another option is to invest your money. Rajan says investments have typically outperformed cash savings over the years - but there are things you should consider. Firstly, you'll need to be willing to put your money away for a longer period of time - at least five years - because markets can fluctuate and it will give your money a better chance of growing if you keep it invested for longer. You should be aware that you can lose money by investing and be prepared to take that risk. Because of this, it's crucial to still have an emergency fund in case you have any unexpected expenses. Rajan says: 'The most important thing for you is, is this something that I'm happy to do? Is this something that I'm comfortable doing? 'When it comes to your savings it's really important to make sure that you are comfortable with the choices you make.' How to get the best savings rates Consumer reporter Sam Walker offers some top tips for getting the best savings rates in 2025. Use comparison sites - use comparison sites like MoneySupermarket and Go Compare to compare the best deals on the market within a specific sector. Depending on the site, they will let you know about any minimum pay ins, when interest is paid and how to open the chosen account. Make sure the account matches your needs - different savings accounts offer different perks so choose the one that suits your needs best. For example, easy-access savings accounts tend to offer lower interest rates, but more flexibility if you need to withdraw money on a regular basis. Meanwhile, cash ISAs are ideal if you have a bigger pot of money you want to stash away as any interest earned is tax-free. Look beyond high street banks - sometimes smaller banks and building societies will offer you better rates than the bigger, more notable names. Last year, Which? warned that the biggest banks were offering "meagre rates compared to digital banks and building societies. Read the fine print - make sure you read all the terms and conditions before opening an account so you're aware of any drawbacks. Some banks penalise you by dropping your interest rate if you withdraw money from your savings account over a certain amount of times. Others only start offering you a certain interest rate when you have deposited a minimum amount too. Keep up-to-date - savings rates change all the time so it pays to stay informed of what banks and building societies are offering. You can do this by visiting price comparison websites like MoneySavingExpert and MoneySupermarket.
The Sun
13-06-2025
- Lifestyle
- The Sun
Youngsters set to spend £1,170 on ‘spontaneous summer' with majority dipping into savings to cover cost, research shows
A SUMMER of spontaneity may be off the cards, after new research has revealed it could set young adults back £1,170. The study of 2,000 adults found 18-34 year olds will face parting with £90.22 a week on unplanned activities. 3 3 Also, a hefty 67 per cent admitted they are far more likely to go out on a whim now than at any other time of year, with 47 per cent justifying their actions with a 'you only live once' attitude. These last minute outings include pub visits (27 per cent) and day trips (38 per cent) - while a further 21 per cent will even attend a festival at the drop of a hat. Rajan Lakhani, personal finance expert for Plum, which commissioned the research, said: 'When the days are longer and the weather is warmer, it is only natural we want to be out more taking part in activities. 'During the summer there is so much for young people to do, from festivals, day trips and holidays abroad, it's no wonder so many people love to splurge.' However, with youngsters being strapped for cash, 68 per cent find themselves dipping into savings to cover the cost. The research revealed that people have to take £125 out of their pot each month over the summer period. Mr Lakhani said: 'When you're young you're more care-free and have more wiggle room to be spontaneous in your life, but it does come at a cost.' However, despite the more care-free attitude adopted in the hotter months, only 14 per cent of Brits actually feel prepared when it comes to last minute summer splurges. Of those who do have spontaneous expenses, it leaves 17 per cent feeling guilt, while the same percentage feel happy in the moment, but regretful later. But, 42 per cent admitted to finding it hard to say no to fun activities when the sun is shining, even if they are on a tight budget. Mr Lakhani added: 'It's not just younger people who struggle to say no when the weather turns nice. 'The whole nation feels the pinch when something fun in the sun crops up. 'But it is surprising how few people feel prepared for this, even though it seems to happen every year.' The data also revealed that 42 per cent of young people use their current account to cover these unforeseen expenses, 40 per cent use an active savings account, and just 15 per cent use a cash ISA. To help them stay on top of their finances, 37 per cent would be likely to use a budgeting tool that automatically analyses summer spending, according to the OnePoll figures. Mr Lakhani said: 'Fortunately, there are automated tools that help you easily review your summer spending and help you get it under control. 'This includes lots of ways to manage spending, including savings tools like round-ups, which are designed to help you save while you spend, so spontaneous spending sprees won't leave you feeling regretful.' 3
Scottish Sun
13-06-2025
- Lifestyle
- Scottish Sun
Youngsters set to spend £1,170 on ‘spontaneous summer' with majority dipping into savings to cover cost, research shows
SPLASH OUT Youngsters set to spend £1,170 on 'spontaneous summer' with majority dipping into savings to cover cost, research shows Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A SUMMER of spontaneity may be off the cards, after new research has revealed it could set young adults back £1,170. The study of 2,000 adults found 18-34 year olds will face parting with £90.22 a week on unplanned activities. Sign up for Scottish Sun newsletter Sign up 3 Young adults face parting with over £90 a week on unplanned activities this summer Credit: SWNS 3 Expert Rajan Lakhani acknowledged that it's hard to turn down spontaneous plans in hotter weather Credit: SWNS Also, a hefty 67 per cent admitted they are far more likely to go out on a whim now than at any other time of year, with 47 per cent justifying their actions with a 'you only live once' attitude. These last minute outings include pub visits (27 per cent) and day trips (38 per cent) - while a further 21 per cent will even attend a festival at the drop of a hat. Rajan Lakhani, personal finance expert for Plum, which commissioned the research, said: 'When the days are longer and the weather is warmer, it is only natural we want to be out more taking part in activities. 'During the summer there is so much for young people to do, from festivals, day trips and holidays abroad, it's no wonder so many people love to splurge.' However, with youngsters being strapped for cash, 68 per cent find themselves dipping into savings to cover the cost. The research revealed that people have to take £125 out of their pot each month over the summer period. Mr Lakhani said: 'When you're young you're more care-free and have more wiggle room to be spontaneous in your life, but it does come at a cost.' However, despite the more care-free attitude adopted in the hotter months, only 14 per cent of Brits actually feel prepared when it comes to last minute summer splurges. Of those who do have spontaneous expenses, it leaves 17 per cent feeling guilt, while the same percentage feel happy in the moment, but regretful later. But, 42 per cent admitted to finding it hard to say no to fun activities when the sun is shining, even if they are on a tight budget. Mr Lakhani added: 'It's not just younger people who struggle to say no when the weather turns nice. 'The whole nation feels the pinch when something fun in the sun crops up. 'But it is surprising how few people feel prepared for this, even though it seems to happen every year.' The data also revealed that 42 per cent of young people use their current account to cover these unforeseen expenses, 40 per cent use an active savings account, and just 15 per cent use a cash ISA. To help them stay on top of their finances, 37 per cent would be likely to use a budgeting tool that automatically analyses summer spending, according to the OnePoll figures. Mr Lakhani said: 'Fortunately, there are automated tools that help you easily review your summer spending and help you get it under control. 'This includes lots of ways to manage spending, including savings tools like round-ups, which are designed to help you save while you spend, so spontaneous spending sprees won't leave you feeling regretful.'
Daily Mirror
12-06-2025
- Business
- Daily Mirror
Spontaneous plans will cost young Brits over £1000 this summer
A study of 2,000 adults found that during the summer months, 18-34 year olds are prepared to part with £90.22 a week on unplanned activities This season, those aged between 18 and 34 are expected to spend an average of £90.22 per week on spur-of-the-moment activities, totalling £1,170 on average. Most people confessed they are more inclined to make snap decisions about going out during the warmer months, than any other time of year. These spontaneous activities often include last-minute trips to the pub, trips out and for some, even a festival. Brits predominately use the motto "you only live once" to justify for their spending. However, to fund these unexpected summer escapades, seven in ten will need to raid their savings, withdrawing an average of £125 on a monthly basis. Rajan Lakhani, a personal finance expert at Plum, which conducted the study, commented: "When the days are longer and the weather is warmer, it is only natural we want to be out more taking part in activities." He added: "During the summer there is so much for young people to do; from festivals to day trips and holidays abroad, it's no wonder so many people love to splurge." Lakhani also noted: "When you're young you're more care-free and have more wiggle room to be spontaneous in your life, but it does come at a cost." The research found only 14% of Brits feel financially prepared when it comes to last minute summer plans. Those who do end up spending their money spontaneously, 17% are left feeling guilty, while others feel happy in the moment but regret it later. Four in ten confess they struggle to resist fun activities when the sun is out, even if their budget is tight. As a result, while most people will utilise their current account, 40% are likely to tap into an active savings account and an additional 15% will dip into their cash ISA. To keep their finances in check, 37% would be inclined to use a budgeting tool that automatically analyses summer spending, as per the figures from OnePoll. Rajan Lakhani from Plum added: "So it's not just younger people who struggle to say no when the weather turns nice. The whole nation feels the pinch when something fun in the sun crops up. "But it's surprising how few people feel prepared for this, even though it seems to happen every year. Fortunately, there are automated tools that help you easily review your summer spending and help you get it under control. "This includes lots of ways to manage spending, including savings tools like round-ups, which are designed to help you save whilst you spend, so spontaneous spending sprees won't leave you feeling regretful."
