Working out your weekly or monthly budget is an important first step to managing your everyday finances. A budget is a record or prediction of how much money you have coming in and going out. Once you’ve created a budget, it will help you understand what you need to do next.
How to create a budget:
Write down your regular income from all sources. This could include:
- pension payments.
Then add all this together.
Write down everything you spend. Then add all this together. Be realistic and make sure you put in enough for items such as food, housekeeping, heating and transport costs. Remember that if you have cancer, these costs may increase. For example, you may need to have a more expensive diet, additional heating, or more hospital visits.
Bank statements, credit card statements and bills will help you work out how much you are spending. If you’re not sure where all your money goes, try keeping a spending diary for a week or two.
Subtract your total spending from your total income. If the final amount is less than zero, then you have a shortfall. You may be able to cover a shortfall in the short-term by using savings or borrowing (see the sections on Income and Borrowing). But in the long-term, a shortfall isn’t sustainable and needs to be addressed. Check whether you can increase your income and look at ways to cut your spending.
If you can’t get your budget to balance and you’re getting into debt, you can contact StepChange Debt Charity for some advice.