Personal Expenditure Budgeting

To draft out a budget of income and expenditure is a simple way of ensuring that you will not commit yourself to spending more than you earn.

Specimen monthly budget of a young married couple living on a single income

Revenue £ Expenditure

Net take-home pay after tax, NI contributions and company pension contributions 420

Mortgage instalment 110

Rates and water rate 20

Gas 8

Electricity 7

Telephone 10

Property insurance 4

Contents insurance 2

Car overheads:

Licence £60 p.a.

Insurance £75 p.a.

Maintenance £105 p.a.

£240 divide by 12 20

TV licence at £304 p.a. 3

Fares to work 40

Life assurance (net) 11

Total fixed expenditure 235

Thus available for variable expenditure 185

420 420

If in this example the couple's expenditure on food comes to around £100 a month, and if clothing replacements average £20 a month, petrol, oil, tyres and batteries costing another £20, there will be £45 a month left over for holidays, entertainment, eating out, property repairs, decorating and spending money, as well as an amount for saving. The budget may seem a bit tight; possibly an economy holiday will have to be taken in the present year. It's up to each household how best to lay out the available money to get the most satisfaction.

• Personal Costs
• Interest Rate Example