How to find more money for entertainment

Rather than struggling to get by on £100 spare income, here are some tips from money advisers.

A quick poll of 1,000 people by My Voucher Codes found that respondents averaged less than £100 per month to spare after bills, by their own estimates. Charity money advisers realise that these quick estimates often cover up large possibilities for extra savings and cutting bills.

With some simple steps you can increase your fun money, pay off debts faster and build an emergency pot, which pulls you away from a dangerous edge that any number of every day disasters could push you over. It brings you greater self-confidence and security, and it starts you on a path to wealth.

Over the years I have interviewed bank representatives and debt collectors, as well as debtors, debt advisers and money advisers. I have also read thousands (literally) of messages from debt advisers, debtors and former debtors, and I have built up a solid picture of the advice that you will typically get when you are living close to your financial limits. Here's what a debt adviser might tell you:

Face the music

The first thing an adviser would want you to do is be brave and open all your bank, loan and credit-card statements, and all your bills, and piece together how much you earn as well as estimate your food, housing, travel, insurance and utility costs, as well as medical and dental bills, and birthday and Christmas expenses. Do this for a whole year and then divide it by 12 to get average monthly amounts.

Pay your priority debts

Ensure you always pay off your priority debts and bills first. If you have an emergency and as a result you can't pay all your bills, keep paying the following if possible: 

If you've already missed these bills, paying off the arrears is a priority. Personal loans, credit-card bills and telephone bills are not priority debts.

If at any time you're worried you're going to miss a priority bill, or any bills, or if you have done so already, get free help from money advice charities such as Citizens Advice and National Debtline. You could also check out the Consumer Credit Counselling Service (CCCS), a debt charity that writes a blog right here on lovemoney.com.

Council tax and benefits

Make sure you're claiming any council tax discounts and benefits you're entitled to.

Telephone, internet and cable TV

Quite often an adviser will question why these bills are approaching £100pm, particularly if you also spend £20 or more on your mobile phone. (Most people would reduce their bills by switching to pay as you go.) Do you really need the cable TV, or could you at least swap the deal for something cheaper?

Gas, electricity and water

If your energy bill is over £100pm, unless you have a big family, you're probably paying too much. You can cut bills by hundreds of pounds per year by comparing and switching tariffs. Consider simple things such as switching off electrical items at the plug, turning down the thermostat and reusing water (e.g. to water the plants), which can save you a few pounds a month. It all helps.

Groceries, school dinners and ready meals

If you monitor carefully what you buy for a whole month, you can dramatically cut grocery bills by replacing items with cheaper ones. Also, would a packed lunch be cheaper for your children – and for yourself, if you often find yourself buying coffee and sandwiches?

Read our Frugal Food blog for tips on where to find the best food bargains at the supermarket every week!

Clothes

If you're spending close to £100 on clothes, that is a lot of money for someone with little spare income. Try to halve that by keeping a record of your spending. If you're really struggling with money, for the time being, it is better to aim for around £20-£30 per month per person.

Holidays

If you're having trouble paying your debts, you will normally be told that even saving £50 per month is probably too much. However, if you're not already overlapping the financial danger line, as much as £50 might not be unreasonable. There are more than enough ways to make that sort of money stretch to a good break or two with careful planning.

Car costs

Many people think that losing their car is rather like losing a limb, but try to imagine carefully what life would really be like without it. Could you adapt? Would it save you money to get rid of the petrol, insurance, tax and maintenance costs? Could you move closer to work, or walk or cycle more? If not, could you get a cheaper car? Is the car merely a status symbol in your case?

Personal debts

If you're trying to pay off debts, don't pay off the largest debt first, but the one with the highest interest rate. You will much more rapidly reduce and pay off your debts in this way. However, don't miss any minimum-monthly repayments on any of your debts, if possible.

Credit-card spending

It's easy to trick yourself into spending twice as much as you want to on fun stuff or clothes by buying from both your debit card and your credit card every month. I've seen this done several times by shopaholics myself.

When you buy with your credit card, the simplest way to stop deluding yourself is to count that cost towards this month's fun allowance, and not to the next month when you pay off your credit-card bill.

Extra income

If you have a spare room you can get a lot of extra cash, tax free, through the Government's rent-a-room scheme. As hard as it may be today in the UK, you could also look for a few hours extra work to help put you in a safer financial position.

More: Compare cheaper credit cards through lovemoney.com | Personal loans at 2007 prices | Get debt advice for free