Money Matters - recording your expenditure.

There is no doubt that people across the UK are experiencing tough times. With stubbornly high inflation even if people have had a pay rise, often they are left out of pocket.   In this, the first of 3 advice articles, we will explain how to create a budget and start getting your finances in order.

It sounds obvious, but many people do not have an accurate picture of how they are spending their money each month. 

The first step is to record your outgoings and set them against your earnings.  If you have access to a computer, use a spreadsheet to do the sums for you.  Email enquiries@getbackincontrol.co.uk for a template or grab a calculator and set pen to paper.

Make one table for your incomings.  Make sure you record the actual take home amount and not the one which is before your taxes/ national insurance contributions/ student loan payments are deducted.

In another table make headings for the different types of expenditure you have. While the list given is substantial it is not exhaustive, so it is important to gather all your bills and receipts to build an accurate record.

Input all the information you have into the Actual column.  If you have a lot of bills and receipts, you might find it easier to categorise each receipt first and put them into piles – one for groceries, one for clothing, one for petrol, for example, before you input the figures into your spreadsheet.  To accurately reflect your expenditure create extra rows under the headings – for example, under insurances have you listed your car insurance, life insurance, home and contents insurance?

While you might get paid monthly or weekly, most people spend something almost every day.  Don’t forget to input it all, however big or small.  For expenditure such as MOTs, holidays and dental work it is a good idea to work out what you would spend annually on these often one of things and divide it by 12 to ensure that you are accounting for them in your monthly budget.

Once you have done this you will be able to make some judgements and therefore some adjustments. Firstly, is your expenditure exceeding your income?  Secondly, where you could afford to cut back on your spending?

Could you negotiate better deals with utility providers?  Could you cut back on grocery spending?  Could you walk to work or car share?  Now, in the right hand column labelled Budget, input a figure which you think you can realistically stick to.  This is your target for next month.

Make completing this record a daily habit.  The very act of recording your expenditure will help you limit it.