Please support us, buy through our webshop

Step 3 - Completing a personal budget:your spending

Once you have calculated how much income you receive on a regular basis, your next step is to list and calculate your expenditure over the same period - that is, depending on how you calculate your income (weekly or monthly) do the same for your expenses.

It is important to note that, at this stage, you should include the necessary repayments to maintain the ongoing commitments to your priority creditors (such as your mortgage repayments), but you should not list any of arrears (missed payments), debts or credit payments. Instead, you should include the details of the following expenses:

Housing costs - such as rent or mortgage payments, service charges or ground rent, water charges, council tax, secured loan repayments, insurance cover costs, etc - and be sure to include a small amount to cover the costs of any essential repairs or emergencies

Utility costs - should include gas, electricity or other fuels, such as oil or paraffin, that you use

Living expenses - such as your food shopping, prescriptions, toiletries, cleaning materials, nappies, laundry costs, etc - you should also include a small amount to cover items of clothing, footwear and other irregular expenses that may come up

Childcare costs - not only should you include the costs of any childcare that you may pay for, such as a nursery or childminder, but you should also include the costs of school uniforms, school lunches, etc

Travel expenses - such as the cost of fuel, insurance, tax, MOT's, servicing and general maintenance of a car or motorbike, bus, train and taxi fares

Television costs - such as the costs of a TV licence. Also, if you rent your TV, video or DVD equipment, you should include the rental costs.
Emergency fund - you should also include a small amount to cover the costs of any emergencies or irregular payments, such as people's birthdays and Christmas, any unexpected events

Try to keep your expenses to a minimum. You are going to have to stick to your budget, so make sure the amounts you include are realistic and reasonable. Once you have listed all of your regular expenses, you should add them together to calculate your 'total expenditure'.

You now need to subtract your total expenditure away from your total income to calculate what money (if any) you have to pay your debts after your basic living expenses.

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 expenditure list before moving on - click on the 'print' button to print the page (or if you don't have a printer, save the page in a word document).

Reduce your expenditure

You should consider whether it is possible to somehow reduce your overall spending. This doesn't mean cutting back on essential items, such as food or prescriptions, but probably means avoiding luxury items.

Your next step in completing your personal budget is to list and calculate your debts, starting with your priority debts first- please click here to continue