Surviving On A Budget- The Reality Check...posted on 6 April 2011 | posted in General Category | ( 1 ) CommentsIt’s so easy to spend, spend, spend but do you know how much can you spend before falling into debt? Do you know what your income is compared with your expenses? Integrity take's a look at why you need to make a budget. Quite simply if you spend more than you can afford you will quickly end up with debt problems. Quite simply you need to make a budget to help you manage your money more effectively. A budget helps you to control your personal finance – you can easily see what money you have coming in and where the money is going out to each month. If you are struggling with debt problems, making a budget will help show you how much you can offer to your creditors. You may be a serial spender, like to go shopping to cheer yourself up or simply need to have the latest ‘must have’ gadget. But the spending needs to be managed. There really is no point getting yourself into financial difficulty as a result of letting your spending get out of control. Make a budget that includes some ‘me expenses’ and then you know what you can and cannot spend on those designer clothes, kindle, smartphone etc. As long as the ‘me expenses’ sit alongside ‘must have’ expenses and all these expenses add up to less than your income then your money management should be fine – if the expenses exceed the income then of course you will need to reassess your expenses and keep doing so until your budget balances. Whilst having a budget may seem difficult, it really isn’t. There’s lots of help available, for example on the Government money mad eclear website, as well as money management software to use to record your financial transactions. Here's a simple test everyone should do: A simple test is to not use your credit cards for a whole month, make the minimum payments on them, after you have paid all your other fixed costs such as mortgage, Council tax, utility bills, loans etc etc and then see if you can get through the month by just using the cash left from your wages. If you can get through the month without dipping into your credit cards then your finances are probably sound, however if you run out of cash part way through the month and have to use your cards for everyday expenses such as food and petrol then you need to take a long close look at your finances. Start by completing a simple household income and expenditure form [excluding unsecured debt repayments] and if the money left over each month is not enough to cover your minimum contractual payments on your unsecured debt repayments then you really need to take action sooner rather than later. Share this blog entry:
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