A budget is an overview of the total income and total expenditure of a household. It helps ensure you always have the funds available to pay your essential bills (or priority debts) on time. A budget also helps you work out how much surplus income you have left over per month to offer to your non-priority debts, for example your loans and credit cards.

Tips to reduce your expenditure

Always keep an eye on outgoings so that you don’t overspend on utilities, transport costs or other expenses. Always check multiple providers to see if you can get a better price for the same service or goods elsewhere. By slowly working through your expenditure to ensure you get the best deal on everything you can potentially save hundreds of pounds a year. Some examples of ways you can save money is below:

• Utilities: It is important to budget for utilities, but your energy company can offer many different tariffs and options. It can be confusing to work out which deal is best for you. The Consumer Council has an online tool with up to date tariff costs for electricity and gas. You can check if you are paying the lowest price for your usage by visiting: www.consumercouncil.org.uk/consumers/save-money/energy/considering-switching-supplier.
• Mobile phone providers: Check your phone contract is the best price you can find for your usage, and that you are not overpaying for data or minutes you don’t need. Most internet mobile deals are better than those available in-store, even if you go direct to the network provider. You can also save further by paying by direct debit and switching to paperless billing. Avoid using directory enquiries or number search company that charge, as you can generally find a phone number for free on the internet. If you must use a directory enquiries service, take down the number and dial them directly rather than being transferred through as you can still be charged the premium minute rate after transferred through.
• Internet & TV: It pays to shop around for a good deal as there are so many different companies offering broadband. Many companies also offer discounted digital television packages as part of their broadband deals, but you should still check to see if you can get a better deal paying for these separately. Make sure any usage cap is suitable for your needs to avoid further charges. If your current contract is finishing, don’t be afraid to contact your provider and ask for a better deal. Ofcom has an online comparison guide to check for phone, broadband and digital TV prices. You can check if you are paying the lowest price for your needs by visiting: www.ofcom.org.uk
• Travel Costs: If you use public transport, you could save money by buying a weekly, monthly or annual travel pass directly from Translink. Running a car can be expensive so use comparison websites and shop around for your car insurance every year. Automatically renewing with your current provider is rarely the cheapest option available. 

Tips on saving

If you have surplus income left over after paying your priority and non-priority costs you should allow yourself an affordable weekly or monthly amount in your personal budget for occasional costs like Christmas, birthdays or car repairs. You should always try to put something aside for unexpected costs and emergencies if you can. 

You should save in a bank or building society account that will pay interest on your savings. Shop around for the best deal or speak to an independent financial adviser. You could also check if there is a local credit union you can join. Credit unions are saving schemes run by their members which allow you to borrow at least twice more than you have saved once you have been a member for a certain length of time. These borrowings are usually at a low interest rate and the repayments can have some flexibility.

Five key guidelines for managing your finances 

• Once you are aware that you are struggling with balancing your finances, don’t ignore the problem. It won’t go away unless you face up to it. The longer you leave it, the worse it will get and the harder it can then be to rectify.
• You should not automatically seek further credit to help budget your finances – this can make your situation even worse. Think carefully before obtaining credit to help budget as your outgoings will increase further with the additional debt.
• Make sure you maintain payments on all your priority outgoings first, before making offers towards your non-priority debts such as credit cards, loans and catalogue debts.
• If you decide that making reduced offers of payment to your creditors is the way to deal with your non-priority debts, prepare your personal budget using the template on this factsheet and following the steps above. Contact everyone you owe money to and offer to pay a reduced amount that you can afford.
• If you feel overwhelmed with the situation, there is free and professional advice and assistance to help you make sure your situation doesn’t deteriorate. Our advisers are non-judgemental no matter your circumstances.