4. Income Maximisation:

If you are struggling to repay debts or are experiencing financial difficulties, it’s important that the money you have is being put to best use. Find out more about Income Maximisation and see how you can effectively budget to help pay back your debts.

What is Income Maximisation?

Simply put, Income Maximisation is getting the most out of your money and how you ensure you are getting all of the income that could be available to you, from a number of sources.

You can maximise your income by:

  • Making a budget
  • Claiming all the benefits you’re entitled to
  • Check you’re being paid the right amount
  • Increasing your income

1. Make a budget

You should have already put your budget together in Section 1, as this will give you an accurate picture of how much money you have leftover each month. If you haven’t yet done so, head over to our building a budget section before you take the next steps.

2. Claim the right benefits

It’s important to keep a close eye on your benefits to make sure you are receiving every penny you are entitled to.

You may be able to claim benefits if you are:

  • A parent/carer or pregnant
  • Unwell/disabled
  • Seeking work or on a low income
  • Have had a recent change in circumstances

If you claim benefits, you may be entitled to:

  • Council tax reduction
  • Housing benefits
  • Pension credits

It’s worth checking your benefits and bills to make sure you are earning and paying the correct amount. Find out more about benefits and use our benefits calculator to find out what you may be entitled to.

3. Check your income is accurate

There are a few things you can check to ensure you are getting the most from your employer and all you need to do is check your payslips. Check to see:

  • Are you earning what was agreed in your contract? Check your payslips every month to see if you are getting paid what you are entitled to. If you’re on minimum wage, check the national minimum wage to see if you’re being paid what you legally should be.
  • Are you in the correct tax band? If you are not in the correct tax bracket, then you could possibly be paying too little or too much tax. You can check the Government’s website to see if you are in the correct band.

4. Increase your income

Increasing your income is a great way to find more money to pay towards your debts. To make a start on raising funds, you could take stock and sell any unwanted items you have – you may be surprised at the amount you could make. Sites like Gumtree and eBay are great places to start, as well as local (or virtual) car boot sales.

To get a regular extra income, you could rent out a spare room in your house to raise extra funds. The Rent a Room scheme lets you earn up to £7,500 a year (or £625 a month) tax-free, and sites like Airbnb can promote your room for free before taking a small commission after a booking is completed.

Another way to make money is to take on a part-time job or increase your current working hours (overtime), if you have the capacity to do so. It’s worth talking to your employer to see what options are available to you, or if you can put a case forward for a pay rise.

Next, you can look at ways to cut back on your costs with our Reducing your Spending Guide.