Step 2. Make a list of everything you spend each month
1. Start with your most important bills, such as:
- Your mortgage/Rent
- Council tax
- Utilities like gas, electricity and water
These are your 'priority bills'.
Find out more about what bills to pay first.
2. Next, write down what you usually spend on living costs, including:
3. You need to include things you pay for less often, like:
- Car repairs
- Vet's bills
To do this:
- Divide the yearly cost by 12 (the months in a year)
- This gives you a monthly figure for your budget
- Set this money aside until the bill is due
It may help to write down everything you buy over a month.
Step 3. Subtract your spending from your income
Any money left over after everything is paid for is called a ‘budget surplus’.
It is called a 'budget deficit' if you spend more money than you have coming in.