Step 3: Make a financial statement

After increasing your income and reducing your expenses, create a simple financial statement to give you a strategy for dealing with your debts. It can also demonstrate your financial position to creditors.

To do this, list all of your sources of income. This includes your net salary, benefits or tax credits and any other financial help, such as contributions from other household members. If you’re on a low income, an experienced adviser can see whether you are entitled to benefits.

Next, add up all of your expenses. These are basic living costs like mortgage or rent payments, household bills, hire purchase items, children’s expenses and healthcare costs. Make sure these are realistic. And don’t forget less obvious costs such as clothing, school meals or emergency funds.

Any income you have left over after these expenses are paid (income minus expenses) is your disposable income. To work out your budget, you’ll need to choose either monthly or weekly figures.

Your financial statement may become a key document. If you’re dealing with creditors, you can use it to suggest repayment plans.

Why complete a financial statement?

The third important step is to produce a simple financial statement to show your creditors. This shows how much income you have and how much money you need to meet basic expenses. Do not include debt payments on this statement.

A financial statement is an essential tool when dealing with debt problems. It presents a clear picture of individual or family income. It clearly shows what you spend and available disposable income (how much money you have left over after you have paid your essential living expenses).

Once you have completed a financial statement, you can show your financial position to creditors or courts. This will help you plan how to deal with your debts. It’s important to make sure your financial statement is realistic. It should always reflect what actually happens in practice and leave you with enough money to pay your main expenses.

Download a financial statement that you can fill in with your income and expenses.

How to fill in your financial statement

Completing a financial statement will help you start dealing with your debts.

Follow these instructions to fill in your income and expenses as fully as you can. If you need help, call our financial guides on 0808 808 00 00.

Calculating weekly and monthly payments

Decide whether you want to use weekly or monthly amounts and use this for all of the financial statement. If you are paid a monthly salary, you may find it easier to use monthly amounts. If you are paid weekly, then you may want to produce a statement using weekly amounts. Don’t mix the two or the sums won’t work out. To make sure all your amounts are given in the same way throughout your financial statement, you may need to do some calculations.

If you want to calculate monthly income and expenses

You may receive some of your income weekly or some costs may be paid weekly, for example food shops and travel expenses. To convert those weekly amounts to monthly amounts, do this:

Cost/income per week x 52 ÷ 12 = cost/income per month

Do not approximate and multiply weekly numbers by four. This will mean only 48 weeks have been accounted for. You need to calculate for 52 weeks.

Other income or costs may be received or paid quarterly (four times a year), for example a service charge or electricity. If that’s the case, do the following calculation:

Cost/income per quarter x 4 ÷ 12 = cost/income per month

If you want to calculate weekly income and expenses

You may receive some of your income monthly or some costs may be paid monthly, for example mortgage and insurance. To convert the monthly amount to a weekly amount, do this:

Cost/income per month x 12 ÷ 52 = cost/income per week

Other income or costs may be received or paid quarterly (four times a year), for example a service charge or electricity. If that’s the case, do the following calculation:

Cost/income per quarter x 4 ÷ 52 = cost/income per week


You may need to add amounts together before you can write the income item on the financial statement. If it helps, you can write the breakdown of each income item on a separate sheet of paper and include this with the financial statement. See step 1 for advice on increasing your income.

Income includes:


Add the income from your net pay once all deductions have been made. Only include overtime if you receive it regularly. Your net pay is your wages after paying tax, national insurance and any other deductions.

Benefits and tax credits

If you’re on a low income, it’s always a good idea to have your entitlement to benefits checked by an experienced adviser.

Disability benefits

If you have cancer, you may qualify for disability benefits. Please note that Disability Living Allowance (DLA), Personal Independence Payment (PIP) and Attendance Allowance (AA) are intended to cover health needs, so your financial statement needs to represent this if you’re receiving any of these. This means that these benefits need to be recorded as income, but that you should also show how you’re using this money as expenditure for care needs, perhaps under ‘other costs’ or ‘healthcare costs’. If necessary, you can detail any extra information or what is included in each amount on a separate piece of paper.

Other income

This includes contributions from other household members, for example, non-dependants, lodgers or boarders.


You may need to add amounts together before you can write the expense item on the financial statement. If it helps you, you can write the breakdown of each expense item on a separate sheet of paper and include this with the financial statement. See step 2 for advice on reducing your expenses.

Expenses include:

Council tax (rates in Northern Ireland)

Council tax is usually paid in 10 monthly instalments. Don’t try to spread it over 12 months. Write the monthly amount that you pay on the financial statement.


If you pay this quarterly, you’ll need to add your last four bills together and divide the total by 12 to give you a monthly amount. To get a weekly amount, divide the total by 52 instead.

If you pay on a pre-payment meter, think about what you use in the winter and the summer and average this out to get a monthly amount.


Include your regular landline and mobile bills. These should be classed as essential when you’re unable to go out due to your illness or if you’re in hospital, as it helps you keep in touch with family or work.

TV licence

If you pay this annually, divide the cost by 52 for a weekly amount or by 12 for a monthly amount.


This should include all food items, toiletries, cleaning materials, newspapers and so on.

Add an extra figure for any special dietary needs, but you need to state a reason for these on the financial statement.

Hire purchase items

Hire purchase is a type of borrowing where the creditor can take the goods back if you don’t keep up to date with the payments. It is often used to buy big items such as a car. If the hire purchase item is needed for your work or due to disability, an explanation of this will need to be included in your expenses.

Motoring expenses

This should include car insurance, petrol, road tax, MOT costs, breakdown cover and repairs.

Other transport

Include travel on buses, trains and taxis. This should include travel to and from hospital as well as travel to and from work/shopping.


You need to account for an amount even if you have not recently bought clothing. £5 per person per week is considered reasonable. If you’ve lost or gained weight, or if your body shape has changed, you could increase this amount, but make sure you explain the reason for the increased figure.

Children’s expenses

This could include after-school clubs or school trips. It is a good idea to add a note about this on your financial statement if these expenses are particularly high.

School meals

It’s worth checking your benefit entitlement to see if your child/children qualify for free school meals.

Healthcare costs

This should include charges for items related to your illness, such as bedding, special equipment and help in the home. Note that prescriptions are free for people with cancer.

Pension contributions

Include contributions you make to a personal pension scheme. If pension contributions are deducted from your salary and paid into a workplace pension, do not include anything here.

Other items

This should include funds put aside for emergencies, union subscriptions or for things like birthdays, public holidays/ religious celebrations and household repairs. You also need to consider costs such as tobacco, alcohol and a small amount for entertainment costs.

Do not include any debt payments in the financial statement. You are still working out how much you can afford to pay your creditors.

Calculate your disposable income

Calculate your disposable income

Your disposable income is how much money you have left over after you have paid your essential living expenses.

To work out your disposable income, you’ll need to:

  • Add up all of your income.
  • Add up all of your expenses.
  • Deduct the total expenses from the total income to calculate your disposable income.

Total income – total expenses = disposable income

If you’re worried that you’re not good with numbers, you can get help filling out these pages.

We have an interactive budget calculator that can help to calculate your monthly income and expenses. This includes a tool to convert from weekly or annual amounts. You can also visit Money Advice Service to work out a detailed expenses breakdown. You’ll also need to assess when you are likely to return to work and regain control of your finances. This will depend on any treatment that you’re likely to have and how long it will last for.

Back to Managing debt and borrowing

Debt and borrowing overview

Living with cancer can bring extra expenses. Learn how to manage your debts using a clear step-by-step process.

Step 1: Increase your income

Increasing your income is the first step to managing your debts. Check your entitlement to benefits and insurance payouts.

Step 2: Reduce your expenses

Once you have made sure you have as much money coming in as possible, there are ways you can reduce your expenses.

Debts you leave behind

If you have debts when you die, it reduces the value of your estate. This means your beneficiaries will receive less money.