Work out your budget

Dealing with money issues can sometimes be off-putting. That’s why we want to make sure you have the information you need to make the right choices. This includes how to get your finances back into shape.

An important step towards getting control of your money is finding out what you have coming in and going out each month.

Working out a budget will show you what you have left each month to settle any debts, or to set aside for emergencies and highlight where you could cut costs – helping ensure you have enough money every month.

Budgeting will also help with those one-off spends such as birthdays, car repairs, holidays and school uniforms that you may find come around and you don’t have the funds to support them.

Here are 5 top tips when working out your budget:

1. Gather important documents

Don’t be tempted to estimate. Help ensure your budget is as accurate as you can by gathering all your statements and bills so you can clearly see your incomings and outgoings.

2. Decide who your budget is for

Consistency is key when budgeting. You need to first decide who you’re working it out for – is it just for you or is it for your partner and family too? Finances often can’t be separated, in which case you should sit down with your partner and do it together.

3. Prioritise expenses

It’s important you understand the difference between needs and wants so you can focus on the essentials first. These include food, rent, mortgage, council tax, fuel bills and any arrears you may have.

4. Make room for surprises

Surprises will happen. We all have one-off spends that can affect our budget planning. But when you work out your budget you will set aside a certain amount to help cover these types of expenses each month.

5. Revisit your budget

You should keep checking your budget at least once a month to give you the chance to deal with changes promptly. Whenever your life changes you should use the budgeting tool again to get up-to-date advice.

To get you started, Citizens Advice have a free budgeting tool that will help you understand what you’re earning and spending and where you might be able to cut costs. This budget tool takes at least 30 minutes to complete and can be found here.

For help and support around debt and finances, you can contact us.