By Uday Tank
Once you’ve started to take control of your finances through an IVA you might want to start forward planning to ensure you get back on track as quickly as possible. In this article we consider how best to save for the future, without having to make major compromises throughout the duration of your IVA.
Once your chosen advisor has prepared your proposal to creditors (i.e. how much you can afford to repay them each month), then he or she will let you know what your living expenses budget will look like. The amount you’re left with at the end of each month (after your IVA repayment) is the exact amount you’ll have left to pay for ordinary living expenses, such as your rent or mortgage repayments, utility bills, food, clothing and any other essentials. That said, there might be certain expenditures within your budget which don’t incur each month, such as home or car repairs – hence the importance to put money aside during your IVA to ensure any unexpected costs can be covered in an emergency situation.
5 Tips for saving whilst you’re in an IVA
Since you’ll already have collated sufficient information about your income and expenditure to give to your advisor, the start of an IVA can be a good time to start saving – and here’s how:
- Consider switching energy suppliers and shop around to see whether you can get a better deal elsewhere. Some suppliers offer a considerable discount if you put all your utilities with them and this can also help consolidate payments for you.
- If possible, see whether you can attract any additional income through overtime or bonuses. Whilst 50% of these additional earnings will be paid into your IVA, 50% will still be yours to save and put to one side.
- Consider opening a savings account so that you’re not tempted to spend any of the money that you’re saving up. Some accounts will even offer interest on the amount invested.
- Look at other ways of saving around the home – for example, by switching a contract mobile phone to ‘pay as you go’, reducing the weekly shopping spend, taking lunches to work instead of buying in the staff canteen and so on. If you keep a very careful note of how much you spend – and on what – you could well surprise yourself on where cut-backs can quite easily be made.
- Think about using your local charity shops for clothing and other essentials, such as homeware. In addition to saving a considerable amount of money on high street prices, you’ll be helping others in need so it’s a great solution all round!
Whilst any money you save from your agreed expenses budget remains yours to keep, you might also want to consider using any savings to settle your IVA early. If you feel this might be an option then it’s important to speak with your chosen advisor for further advice but in some cases, this option can certainly help you to rebuild your financial future sooner than planned – and of course, that can never be a bad thing.
Disclaimer: This content does not necessarily represent the views of IWB.