Three steps for living on a budget

Make the most of your earnings each month

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How to survive living on a budget

Whether we're looking to cover housing, food or travel costs, many of us are living on a tight budget to make our money last the month.

See also: What to think about once you've got a budget

See also: 10 tricks to cut your grocery bill in half - without coupons

This situation can be made worse if you don't have a regular income because you're working part-time or are self-employed.

So we took a look at the three steps to managing your money when living on a budget.

1. Make a budget

The first step is to sit down and work out how much money you have coming in and how much money is going out.

Total up all your income including wages from work and any benefits you are entitled to.

Next, work out how much is going out. This should include your housing costs, travel, energy, phone bill, internet and food. Don't forget to include any outstanding debt repayments like loans and credit cards.

Subtract your outgoings from your income and you have your disposable income for the week or month.

Creating and sticking to a budget really is one of the most effective ways to stay on top of your finances and know how much you can afford to spend. Or even better, work out how much money you can save.

2. Cut your costs

No matter what income you are on, you can always cut costs.

Switching your gas and electricity supplier could save you up to £300 a year, particularly if you've been on your current deal for more than 12 months.

But switching isn't just about energy. Internet, mobile phone, insurance – switching to a cheaper deal for any of these is an effective and easy way to cut costs.

You also need to cut back on things you don't need or use. For example, that morning cup of coffee, or an online streaming service you don't use.

And be on the lookout for savings. Whether you're shopping for food, clothes or anything else, make sure you shop around to get the best price.

3. Maximise your income

Look for extra ways to make money. If you've got any unwanted or unused clutter around the house, think about selling it online to make a little extra money.

If you're on a low income you might also be entitled to benefits such as Universal Credit, tax credits and housing benefit. You might also be able to get a council tax reduction.

This article is provided by the Money Advice Service.

Vintage money-saving tips

Vintage money-saving tips