- Create a realistic and affordable budget
- Work out what you can afford to spend on your unsecured debts
- Avoid overspending and future debt problems by planning your spending
See where your money goes every month with our budget calculator.
We have a budget calculator that can help you to work out your cost of living and how much you can afford to spend on your unsecured debts every month. Remember: even though you may have decided on a figure you'd feel comfortable with, your lenders are not guaranteed to accept any lower monthly repayments.
Why do I need to budget?
It's a really good idea to know where your money is going every month because it can help you to avoid overspending, or taking on too much debt.
Budgeting is really important when you're trying to repay existing debts too: living within your means is the most effective way to avoid overspending and work on paying back the money you owe.
People don't always end up with debt problems because their income drops after something major like redundancy or divorce. In many cases, their debts just grow and grow because they aren't aware of how much they're spending every month, or how much debt they really have - until it's too late.
How to use the budget calculator
Simply type in your income and how much you spend. The budget calculator will tell you whether you are living within your means, or whether you are overspending.
There is a list of most of the common things people spend their money on, including lifestyle, friends and family and household items. There are boxes to the right of the screen to type in your figures. Click 'next' when you reach the end of each page to go to the next page. Click 'calculate' at the bottom of the page to add up all the outgoings on that page.
If you are overspending, the budget calculator can help you to see where you're spending the most money, and highlight if there's any areas where you could cut back.
Begin using the budget calculator.
How do we work out your budget while you're on debt management?
We work out how much 'surplus' money you have available after going through your income and expenses and we create a 'financial statement'. We show your lenders your 'financial statement' and proof of your income, so that they can be satisfied that you are repaying as much as you can afford.
Your lenders are not legally obliged to accept any lower repayment. However, most prefer to receive a smaller repayment regularly, rather than risking not getting anything at all. Over the years, we have also developed an excellent relationship with a large number of lenders.
We only ask you to repay as much as you can afford, after taking into consideration all the things you need to pay for every month, and we will also ask lenders to freeze any interest and charges on your debts.Again, they aren't guaranteed to accept this, but we will negotiate with them for you.
We will then base the amount that goes to each of your lenders on a pro-rata calculation. You'll find a page in the Help Centre which explains how we work out your repayments in more detail.
If you reduce your monthly repayments to your lenders - and they accept this offer - it may take longer for you to pay off your debts and it may also cost you more by the time you have finished. Your credit rating will also be affected by the reduction in your monthly repayments.