Budgeting has two important functions: it gives you a picture of your finances and it is a tool for planning ahead.
To budget accurately, you'll need information on the money you have coming in (known as "income") and everything you spend it on (known as "expenditure").
Income can include:
- any other source of money paid into to your household
You might have other types of income.
Expenditure can include:
- housing costs
- fuel and energy costs
- food, clothing and other shopping
- a TV licence
- mobile, landline and broadband costs
- TV and streaming packages such as Sky, Virgin, Netflix or Disney+
- child maintenance or childcare costs
- transport costs
- home, phone, car or life insurance
- Cigarettes and alcohol
- eating out
- hobbies and entertainment such as gym fees
- credit payments such as credit cards, loans or overdraft fees
You might have other types of expenditure.
You can find information about most of your income and expenditure on your bank statement. It's also worth noting how much you owe on any overdrafts and any savings or investments you have.
Income and expenditure calculators let you know where you stand and give you useful tips based on your results.
Use online budgeting tools
Our recommended online budgeting tools can help you organise the information you need.
These tools have multiple questions which you work through and can take some time to complete.
Budgeting tools use monthly payments as the default setting. If the amount you spend or receive is for a different time period, click on the box and choose the option which suits your situation, for example, weekly, fortnightly or annually. This allows the planner to convert the different time periods into a monthly budget.
You can download a self help guide to budgeting from National Debtline if you prefer not to use the online tool. You can also use their web chat service for guidance and help.Citizens Advice Scotland's Budgeting tool
(opens in new window)The Money & Pensions Service Budget Planner
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What to do with your Budget Planner Results?
There are three basic results that your budget planner can give you:
- Your income covers your expenditure and you have a comfortable amount left over. You should follow the tips to build up your savings or plan ahead. You might want to use a budgeting tracker app, such as Wally or Money Dashboard - These are free and can be downloaded to an iOS or Android phone.
- Your income covers your expenditure, but you have either no money or only a small amount left over. You should follow the tips such as building a pot of money for emergencies or making sure you have good, affordable life insurance. You can also contact our Money Talk Team on 0800 085 7145 or on the Money Talk Team website. They can talk you through how to make savings or extra income. Budget tracker apps such as such as Wally or Money Dashboard are useful in helping you plan your finances.
- Your income doesn’t cover your expenditure. If the shortfall is very small, you should follow the tips as they might be enough to cover the difference between your income and expenditure. This might give you room to build savings. You can contact the Money Talk Team on 0800 085 7145 or by going on the Money Talk Team website to see if there are other ways to maximise your income. You can also visit our sections on immediate and essential money problems.
If the shortfall is more than 15% of your total income, you should get help immediately. You can get advice from your local Citizens Advice Bureau.