Image courtesy of Madeleine Tsoi

It is very difficult to know, with an election looming, as to whether taxes might go up or down. Parties promises different things, but until you know who wins the election and whether they stick to their tax pledges, you can never be sure as to what to expect. It is always wise to prepare for the worst and assume that taxes could rise as you will then be able to cope if they do, but if they do not, you will have extra money to enjoy.

It can be easy to think that only certain tax rises will affect you. That can be true when it comes to things like airport tax and alcohol duty, as you will only pay for these if you buy them. However, most tax we pay is VAT on luxury items, income tax, National Insurance and council tax and if these rise everyone will notice. However, there also indirect effects of increases to corporation tax, for example, where shareholders will get less return, employees might be paid less and consumers may find they have to pay more. So although it may seem that you will not be affected, actually, the chances are that you will. So it is wise to make sure that you protect yourself against tax rises even if you think that you will not see much difference as a result of them.

It is worth considering whether you have some spare money each month that you could use towards paying more tax if necessary. It is likely that many people are struggling already, due to the fact that incomes have not increase don average for a long time and that prices are rising, as they always do. However, by managing your spending a little better, it could be possible to free up some extra money, just in case it is needed.

It can feel like everyone is telling that you need to tighten your belt, but there are ways that you can save without having to go without. Firstly try to get out of debt. Interest on debts can be a huge drain on your finances and so if you can pay them back, you will save so much money. If you have savings, use those because you will be making less interest on those savings than you are paying on your debts in most instances. Compare prices on your electricity, gas, landline, mobile, TV , broadband, insurance, banking, food and clothing, in fact on everything you buy. If you spend just a little time, looking to see if you can save money, you could find that you will have lots of spare cash without having to make big changes to your lifestyle. One big pitfall people tend to make is that they assume that certain brands and shops are cheaper just because they advertise that they are, but if you actually compare the price of a specific product, you may find that it is cheaper elsewhere, perhaps because they have a discount or they just happen to sell it for less, so make sure you always compare even if you think you know.