If you are struggling to make repayments to your mortgage, loans or other debts, then
you may benefit from budgeting tips.
Effective budgeting can help you avoid missing payments to your mortgage, loans
or other debts, because you will be able to plan out where your money needs to go
before you spend it. In addition, once you can see where all your money is going, it
should be easier to see where you can save money by cutting back on non-essential
Budgeting is all about understanding, managing and controlling your finances.
It involves keeping track of your income (the money you earn/receive) and
your expenditure (the money you spend) on a monthly basis.
Budgeting lets you calculate your disposable income – the amount of money
left after your essential expenditure (day-to-day living expenses, like rent/
mortgage payments, utility bills, food & petrol) has been accounted for.
o Your disposable income is the money you have available to service
(make payments to) your non-priority debts (store cards, credit cards,
unsecured loans, etc.) and (if there is anything left) use for saving and
In order to work out your disposable income, you should subtract your total
expenditure from your total income:
o Your total income should be made up of everything your household
earns/receives (salary, benefits, grants, etc.).
o Your total expenditure should comprise your priority debts and
essential costs (mortgage/rent, utility bills, food, etc.) only. You should
not include payments to your non-priority debts, such as your credit
card repayments, because you will make payments to these using your
o Once you have calculated your disposable income, you need to figure
out if it is enough to cover your non-priority debt repayments. If it
isn’t, you should take action without delay. For example, you could
seek professional debt advice.
Budgeting isn’t always easy. Figuring out how much you spend on some things (like
your mortgage payments) may be easy, but other costs (such as food) can be hard to
estimate. A professional debt adviser will be able to give you some budgeting tips,
helping you get an accurate picture of your monthly finances.