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Budgeting and living costs

If you’re finding it hard to keep up with payments to your debts the first step is to create a budget.

A budget is a list of the money you have coming in and all the money you need to spend on your living costs. This helps you to see where your money is going and how much you’ve got each month to pay towards your debts.

Even if you’re not struggling with debt, making a budget and sticking to it is a good idea.

Need help with budgeting?

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1800 937 435

Help with your budget

Putting together a budget can seem daunting, especially if you’re not used to keeping track of your money.

We can help you put together a realistic budget that you can live on, taking into account the money you need to spend. We’ll listen to you and we’ll never judge you.

When we put together a budget, we use a format called the Standard Financial Statement (SFS), which is recognised by all your lenders. If you’re struggling to pay your debts, putting together a budget with us is the first step in getting your finances back on track.

How to create a budget yourself

If you want to put together your own budget, you’ll need a pen and paper and a calculator. It’s also a good idea to have a recent bank statement, bills, wage slips and so on available, so you can note down the amounts from them.

Step 1 – your income

Make a list of all the money you have coming in. Make sure you include all your wages, social welfare benefits and any other income.

You’ll need to decide whether your budget will be weekly or monthly. It’s best to make a budget that matches when you get paid, so if your main income is monthly, make it a monthly budget.

If you make a monthly budget, you’ll need to turn any weekly amounts into monthly amounts. To do this you need to multiply the weekly figure by 52 and then divide this by 12. This will give you a calendar-monthly figure.

Step 2 – your living costs

Once you’ve worked out your income, you need to think about how much you spend. Again you may need to change weekly amounts to monthly amounts, or vice versa.

You need to note down everything you spend, starting with the regular costs such as:

  • Mortgage or rent
  • Household bills such as electric, heating, water and TV Licence
  • Insurances
  • Travel costs
  • Food
  • Debts such as loans, catalogues and credit cards

If you’re not sure how much you pay for these, look at recent bills or your bank statement to help you work out an average weekly or monthly amount.

Next, try to think of all the occasional costs you spend. This might include clothing, haircuts, car repairs or birthday presents. You might not pay out a regular amount for these, so try to think how much you spend in a year and divide it into a weekly or monthly average.

Make sure you write down everything you spend, even the small things.

Once you’ve made this list of expenses and you’re sure you’ve covered everything, try to stick to these amounts. Don’t spend more than this unless you really have to.

Step 3 – what’s left over?

Now you should have a list of your income and a list of your expenses. Add them up so you have two totals.

Then take away your expenses from your income and see what’s left.

If there's money left over we call this a budget surplus. As long as you stick to your budget, you’ll have money available every week or month which you can save.

But if your income is less than your living costs, that’s a warning sign that you may be heading for money problems. This means you’re spending more than you have coming in and you may be getting further in debt each month. This is known as a budget deficit.

Budgeting next steps

First of all, check your budget again to make sure you’ve done your sums correctly and you didn’t miss anything.

Next, see if there are any changes you can make to save some money. If you can cut down some of your living costs, you may be able match your income and spending so things don’t get worse.

Finally, if you can’t work out how to balance your budget, you may need to take more drastic steps such as reducing the amounts you’re paying to your debts. This is where we can help.

Call us for help and our debt advisors can give you practical and realistic advice on your budget. If you can’t afford to pay your debts, we’ll look at all the options available to you and help you find the best solution.

What people say about us

“I was very happy with the service and can’t thank StepChange Debt Charity Ireland enough for their help and support.”

- Majella, County Galway

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