Budgeting

When you are living on a limited income budgeting is a good way of money management. A budget is defined as 'an itemised summary of expenditure'.

How to complete a budget sheet

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Writing out a list of income and outgoings is the first step to producing a budget.

The National Debtline have a free budget sheet you can download and complete.

 

The first step is to write down your income from all sources. That means money from:

  • Wages
  • Benefits
  • Pensions
  • Tax Credits
  • Maintenance
  • Money from other people who live with you

 

The next step is to write down all of your essential outgoings. These can include:

  • Rent or mortgage
  • Council Tax
  • Gas and electricity
  • Water
  • TV Licence
  • Insurances
  • Telephone costs
  • Food, toiletries and cleaning products
  • Healthcare costs
  • Clothing

You then add up all of your essential outgoings and take them away from your income. Whatever is left over is what is available to pay any debts that you may have.

Dealing with debt?

If you are struggling with debt there could be a number of different options available to you. Read our How to deal with debt section for more advice.

If you find that you have more going out than coming in you might want to look at ways of maximising your income and also trying to find ways to save money on your outgoings.

You can get help with completing a budget sheet from free money advice agencies, such as National Debtline, Consumer Credit Counselling Service or Citizen's Advice.

You can also call Rethink's Advice and Information Service on 0300 5000 927.

Spending less

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Rethink's physical health and wellbeing information

Budgeting can also mean living on less money than you currently spend but it doesn't mean that you are not able to enjoy life.

There are some essential outgoings that you spend money that you might be able to get cheaper elsewhere. Shopping around for deals on household insurances, telephone and TV packages is a good way to try and spend less each month. There are websites such as MoneySavingExpert that can help you find the best deals.

Many people who live on a budget have an active social life and enjoy treats now and again. If you like going to play bingo and going to the cinema, limit these trips to once a week and decide a limit to the amount you are going to spend. Factor the amount into your budget sheet. You could contact your local tourist information office or library for news of free events going on in your area.

Keeping fit can often make people feel better and lots of activities can be done for free. You could take a walk or run in a park. Or just stroll around a beautiful garden or along a beach. (Depending on where you live of course!). There is more information about the benefits of keeping fit in our physical health and wellbeing section.

Many people buy things when they are depressed or ill to feel better. However, there are many different ways of treating yourself on a budget. Try treating yourself to a hot relaxing bubble bath, a chocolate bar, hot drink or buy yourself a bunch of flowers.