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Preparing A Personal Budget

Debt Advice Team - Birmingham City Council

A personal budget is a statement clearly showing what money you have coming in to the household and what money you spend. This is sometime called an Income and Expenditure Statement.

The Personal Budget will help you to work out:

• how much money is coming into your household (known as income)
• how you are spending your money (known as outgoings or expenditure)
• where you can make cut backs
• work out what money is left
• work out how much you can afford to offer to your creditors
• plan for the future


When completing a budget you should decide whether a weekly or monthly budget is most appropriate for you. You should not mix the two. As a general rule, if you regularly receive money on a weekly basis, you should calculate a weekly budget. This means you may need to re-calculate some of your income or outgoings to make them all the same.

Use the formuals shown here to convert yor weekly or monthly income and expenditure into another timescale
weekly to monthly weekly figure x 52 (weeks) divided by 12 (months)
monthly to weekly monthly figure x 12 (months) divided by 52 (weeks)
fortnightly to monthly fortnightly figure x 26 (periods) divided by 12 (months)
four-weekly to monthly four weekly figure x 13 (periods) divided by 12 (months)


Income is any money coming into the household. This could be made up of:

• wages or salaries
• pensions
• benefits
• child support payments
• any payments from household members or lodgers


Outgoings are any regular payments made on a weekly or monthly basis. These could be:

• mortgage
• rent
• fuel (gas and electric)
• housekeeping (groceries, toiletries)
• school meals
• pocket money for children
• clothing
• TV License
• telephone (mobile and landline)
• cable/satellite TV subscriptions
• travel (bus fares, petrol)
• buildings and contents insurance
• car costs (insurance, tax & MOT, servicing)
• maintenance payments paid out
• childcare costs
• medical/dental expenses
• sundries (birthdays, Christmas)
• Hire Purchase payments
• court fines
• money set aside for unexpected events

It is not always easy to think of everything that you spend, it can be helpful to imagine a typical week and write down everything that you do that involves money. Then you can work out how much you spend in each category.


Now you need to add up all the income and then add up all the outgoings. Then take away all the outgoings from the total income. Whatever money you have left after you have accounted for all your regular outgoings is called Disposable Income. This should be shared amongst your creditors to clear your debts.


The basis of a good budget is to make sure that your income and outgoings are balanced. The money going out should not be greater than the money coming in. Remember that every household is different, with different priorities. Decisions you make about your finances may not be acceptable to someone else. You need to make your own decisions, but remember there will be consequences if you are spending more than you have coming in.

If you require advice on the best course of action to take to deal with your debts contact the Debt Advice Line on 0121 303 2087

Below is a link to our Personal Budget factsheet which has a sample budget sheet where we have filled in some typical values. Your figures may be very different from this but you can see from the totals how the Disposable Income is worked out. On the back of it is a blank version so that you can write in your own figures.

View Our Range of Factsheets

To view the full range of available factsheets, visit the Factsheet Summary page.

Contact Us

To get in touch, visit the Contact The Debt Advice Team page