Bills, pencil and calculator


It’s vital to know how to manage your cash so you have enough to cover your costs. It’s a bit dull but doesn’t take long, and you’ll feel better knowing where your money’s going. You might also surprise yourself about how much you spend and on what.

Have a look at your budget and, if you need to, think about what to cut back on. If you still don’t end up with money left over, you’re heading into debt. If you can’t even keep up repayments on debts you already have, you’re in debt crisis and need to get help ASAP.

So, how do you plan your budget?
1 List what money comes in each month earnings, benefits, child maintenance, and/or help from family.

2 List everything you spend money on each month. Anything you pay for weekly or fortnightly needs to be worked out as a monthly cost. (For weekly items times by 52, divide by 12. For fortnightly items, times by 26 and divide by 12.)

3 Add up your total income and your total spending.

4 Now take away the amount you are spending, from the amount you earn

If the sum leads to a minus figure, you need to increase your income or reduce your spending. Do you need to reduce card payments or can you shop around to find a cheaper loan? Just remember that the quicker you pay off any debt, the less interest you will end up paying. Maybe now’s a good time to make some healthy lifestyle changes can you make a regular journey on foot rather than by bus? Could you have one or two drinks less each week? Or even cut down on the fags? If you could save £5 a week that’s £21.66 a month!

If the sum shows you have money left over each month, why not think about saving it? Even putting it in a jar each week will soon add up to something worth having. Setting aside £5 a week will add up to £130 in six months. But if you find a good savings account, your bank, building society or credit union will pay you interest on your savings, so you’d have more than what you put in at the end. That means you could start saving for a special treat or even a family holiday. See our guide to savings.

Check your budget with our handy online calculator. Click here to check your budget!