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Write off up to 75% with help from Government Legislation

Write off up to 75%
with help from
Government Legislation

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About Your Debt

About You

Anyone who has ever felt the financial pinch will know just how important budgeting can be. Yet it’s not a skill we’ve necessarily been taught at school or formally educated about. So where do you start?

Calculate Your Income

When it comes to working out your overall income, it can be more effective to do this for a year, rather than a month. When you’re calculating your income, include:

  • Salary (or salaries if you have a second job or freelance earnings as well as your main job).
  • Benefits or tax credits.
  • Additional income, such as rent paid by a family member living with you where applicable.
  • Interest you earn on savings or investments

Once you have an annual figure, divide by 12 to give you an average monthly income

Calculate Your Essential Outgoings

Again, it’s worth starting by working this out for a year. This allows for fluctuations, for example, at Christmas when you might spend more than you ordinarily would in another month.  Write down and add up all the living expenses you’ll incur over a year. This could include the following:

  • Rent/Mortgage
  • Utilities bills
  • Telephone bills
  • Internet costs
  • Council Tax
  • Car insurance
  • MOT
  • Road tax
  • TV Licence
  • Child maintenance payments
  • Repayments on existing debts or credit cards
  • Food shopping

Divide this by 12 to give you an average monthly living expenses total.

Calculate Other Outgoings

Again, do this over a year. This is where you’ll really need to estimate what you might spend over the course of a year and should include things like:

  • Clothing purchases
  • Weekends away or holidays
  • Leisure and recreation
  • Birthday and Christmas presents
  • Eating out and drinking
  • An estimated amount for potential unexpected expenses such as household or car repairs.

Divide by 12 again for the monthly cost.

Putting it all Together

The first thing you need to check is that your income is higher than your essential outgoings and that it’s sufficiently higher in order to cover the non-essential outgoings.

So, take your income total and subtract your essential outgoings total. Whatever is left should be at least equal (preferably higher) than your other outgoings.

Surplus Cash?

If you still have cash left from your total income when you have taken out both your essential and non essential expenses, then consider what you can do with it. You could put it into a savings account or into an investment to get the best of it. Shop around for the best rates.


If your non-essentials exceed what you have left after your essential expenses have gone out, you need to reassess your spending. The obvious place to cut down in the first place is with the non-essential expenses. Maybe eat out less or consider cutting your holiday down to a shorter one. However, don’t assume that there’s nothing you can do to cut down your essential expenses. You could:-

  • See if you can get a better deal with a different utilities company.
  • Check to make sure you have the cheapest deal on your car insurance.
  • Consider trading your vehicle smaller car if possible, in order to cut back on running costs.

If You Can’t Make Ends Meet…

If no amount of recalculating is making your budgeting plan work and your outgoings continue to exceed your income, seek professional debt help in order to find out what options are available to you. Debt Advice experts at MoneySolve are on hand to provide free, confidential debt advice. Get in touch today.

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