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Step 2 - Calculating your total income

The second step in completing your personal budget is to list and calculate what regular money (your 'income') you have coming into your household. By income, we mean any money that you receive, for example through employment or via welfare benefits. You will need this information for two main reasons:

1. You will know exactly how much money you have to spend and where it comes from, and;

2. You can see if there is any way of increasing the amount of money you have coming in (Click here for more information).

When calculating your income, it is important that you record all of your figures as accurately as possible. In order to do this, you should use whatever documentation you have to copy your figures from. Such documents may include:
  • Your last 4 to 5 payslips


  • Your Benefit or Pension books (and any letters relating to them)

When you are completing your personal budget, try to enter your figures as either a weekly or a monthly amount, whichever suits you best. However, try not to mix the two up or your budget will not work effectively.

Generally speaking, if you get paid on a weekly basis – enter all of your figures using weekly amounts. If you get paid on a monthly basis – enter all of your figures using monthly amounts.

You should list all your sources of income on your budget sheet and the amount you get. Once you have completed your list, you should add all of the amounts together to calculate your 'total income'.

If you are using our budget calculator, clicking on the 'calculate' button at the bottom of the first screen will do the calculations for you. You should make a note of your income list before moving on – click on the 'print' button to print the page (or if you don’t have a printer, save the page into a word document).

Maximising your income

Your first objective is to ensure that you are getting all of the money that you are entitled to, through a process called 'income maximisation'. Whether you're in debt or not, it makes sense that you guarantee that you and your family are getting all of the money that you possibly can into your household.

Income maximisation is more than just increasing your income - it is ensuring that your income cannot be increased any further, e.g. you are getting the maximum amount of income that you are entitled to. In order to do this, you should check the following:

  • National Minimum Wage - if you’re employed, then you should check that you are getting this. Click on this link to find the current National Minimum Wage for your age: http://payandworkrightscampaign.direct.gov.uk/index.html
    This is the minimum hourly wage that the law states that you should receive. If your employer is paying you less than this they are breaking the law.


  • Make sure that you're not paying too much tax - Most people are unaware of how much tax they should be paying, and as a result, some people end up paying more tax than they should without realising - check that you're paying the correct amount by calculating your tax liability or seeking advice.


  • Check your benefit entitlement - Many people are unaware that, based on their circumstances, they are entitled to some financial support from the government. Even if you work, you may still qualify for some form of help, such as the Working Tax Credit. If you're already claiming some form of benefit, then you should see whether there are any additional benefits or payments that you or your family may also qualify for. The Bureau can carry out a benefit check for you to see if you are claiming your full entitlement.

  • Is there any other way of increasing your income - Depending on your circumstances, you may be able to increase your income in a number of different ways, from getting a second job to renting a room out to a lodger. If you have an adult dependent living in your home, are they paying their fair share of the bills?


If, after checking the above points, you find that you are able to increase your income, do so and readjust your budget accordingly. However, you may find that you are unable to increase your income because you are already getting the maximum amount possible - if this is the case, just carry on reading through this guide.



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