If you regularly find yourself counting coppers at the end of a month, you know it’s time to work out a budget – but a realistic one you can stick to, without giving up the things you love.
It might not sound like much fun but there are many good reasons to do it. Planning a budget makes you aware of what you can and can’t afford, so you’re less likely to waste money. It also makes you consider the extent of your debt and helps you come up with solutions to reduce it.
The thought of managing your money may make you feel anxious, but it really isn’t so difficult. It’s all about reflecting on where your money comes from and also where it goes to, then taking action. You can draw up a budget plan yourself, or banks sometimes provide free plans. Download one at www.moneybasics.co.uk, www.moneysavingexpert.com or www.mybudgetday.axa.co.uk.
Salary (after tax) £
Buildings/Content Insurance: £
Life Insurance: £
Council Tax: £
Water Rates: £
TV License: £
Car Tax: £
Car MOT: £
Car Insurance: £
HP Payments: £
Credit Cards: £
Store Cards: £
Total Income minus Total Outgoings = Total amount leftover £
Assessing your income
Work out exactly how much money comes into your household per week, month or year – whatever timescale you use you must stick to.
Remember to note down your net salary (after tax) not your gross salary (before tax).
If you’ve got a partner, include what he or she contributes financially too.
This is the hardest bit of the plan – listing everything you spend and being honest about it. You may find it easier to divide your expenditure into categories.