Budgeting means managing your spending so it is
not more than your income. So, if you have £200 of income
a week you should try not to spend more than £200. Before
looking at your own budget try this one for fun.
Mr & Mrs Smith's budget Mr
and Ms Smith have one child of school age and a weekly income
of £200. Which of the following
items would they need to budget for? Think about which items
are most important. And remember – they can only spend
the money they have. So if they spend more than £200
they are not keeping their budget
and they will get into debt! Try
if they really need something. To
find out more you
can take a look at the section below; Things
that I need – things that I want.
Activity: Drag 8 of the 10 items you feel
are most important from the left to a free slot on the right. See how
you manage to balance their budget and what happens when you can't pay
Activity: Now type in your own details:
You can add your own headings next to 'other1' etc on
the 'income' column and also name your own headings under the 'outgoings'
To draw up a more detailed budget for yourself
try our Budgeter in
the Workshops section.
Activity: Things that I need – things
that I want Everybody needs a roof over
their head as well asfood and clothes. There are
also other things that you might need
as well as those you think you
need. Try to make a priority list by
typing in the sheet on the right– put
the things that you need the most
at the top and the things that you
may not need, at the bottom.
So what do you need? As well
as a place to live and food to eat
you also need electricity,
water, a telephone, you need to pay
the Council Tax and the TV licence.
It is illegal to have a TV and not
pay the licence!
Planning for the unexpected Sometimes life throws up things that we didn't expect.
Perhaps something needs replacing or repairing, or there may
emergency. Lots of things can stop a budget from working. Keeping
insurance as a priority expense may protect us against some
such as burglary, loss or accidental damage. It is also a good
idea to put a bit of money set aside for a rainy day.
Robbing Peter to pay Paul The most important expenses are the ones which:
keep a roof over your head (rent, mortgage,
keep you out of prison (Council Tax, court
keep you warm, fed and clothed.
You should try and avoid juggling payments.
If there isn't enough money to go around and you have done all
that you can then you should seek further help from an advice
centre (e.g. the Citizen Advice
Bureau). You could also see our Dealing
with debt page in the Implications of finance section.
What about Christmas, birthdays and holidays? The special times in life are also the most expensive.
Try to spread the cost over the year. In January it may be a long
time until next Christmas but there are some bargains in the sales.
The important thing to remember is that your children won't be
happy if they have nowhere to live! Presents don't have to be
expensive and they should never be prioritised over rent, mortgage
or other important expenses.
Before you rush out and get that loan remember
that a loan this Christmas may mean less money next Christmas.
If you have to get a loan look carefully at how
much it will cost overall and how much you have to pay each week.