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Day 3: What goes in a budget?

How can you sort out your finances if you are not sure what you are spending? That is why making a budget is so important. It will help you plan ahead and keep on top of things.

This will help you see what you should deal with first: your priority debts. We will come back to these. But first, we will help you put together a budget.

Today's tasks...

  1. Find out what information you need to put together a budget
  2. Start putting your budget together using our free template

Task 1: What do I need to put in my budget?

This task will take around 15 or 20 minutes. So it is a good idea to make a cuppa first. Ready? Let's get started. We will make a list of:

Add together all the income you get each month, including:

  • Wages
  • Benefits
  • Pensions
  • Housekeeping money from family members.

Is some of your income is paid weekly? We will need a monthly figure

To do this you need to:

  1. Multiply the weekly figure by 52
  2. Then divide it by 12

Make a list of everything you spend money on to be comfortable.

Are you struggling to remember what you spend? Dig out a bank statement and your shopping receipts over the last month.

  • Start with your priority debts and the amounts you spend on them each month
  • Make a note of any priority arrears you owe, too. If you have a payment plan in place to clear the arrears, note that down too

As well as things you usually spend money on, think about:

  • Christmas presents
  • Birthdays
  • Car tax
  • Vet bills
  • And all those other things that need to be covered during the year

To get the monthly amount:

  • Add everything up
  • Divide it by 12

Divide the yearly costs of these things by 12 to give you a monthly figure to include in your budget. You can then understand what money to set aside until it’s required.

You found these out yesterday. Write the balances for these down.

If you have a secured loan on your property, this would be considered a priority debt. Make sure you include this with your most important bills. 

Lastly, note down any money you owe to family and friends.

For more help, watch our video

Task 2: Start putting your budget together using our free template

We will add these to a budget form. Here are some templates you can use:

Now you have written everything down, it is time to start building your budget using our template.

Once the budget is filled in, save it and print it if you can.

You might find it easier to make a copy of our template in a format that works with you.

All done?

Now, find out what is left over

Next, you need to work out what you have left over each month, once everything is paid for. So, to do this, take away what you spend each month from your total income.

Have you got some money left after paying for everything? If so you have what we call a ‘budget surplus’.

If you are spending more money than you have got coming in, you have what we call a ‘budget deficit’.

Whatever you have - or do not have – left over will determine what the best debt solution for you might be. We will take a closer look at this tomorrow.

For now, take a deep breath and relax. Call a friend, go for a walk, or watch your favourite TV show.

Be very proud of yourself. You have come a long way already. There are just a couple more steps to go until you get your debt under control.

Debt happens. We deal with it.

We have helped millions of people since 1993.

Find out how.

"Non-judgemental debt solution"

"StepChange don't judge you, they are professional and very knowledgeable. Most of the process was done by answering questions and adding your budget. Using Step Change has been a massive weight off my shoulders."

Mary-Ann, Feefo Review