Make your budget work

Why budget?

It’s always a good idea to keep track of your money

Budgeting is keeping track of the money you have coming in and what you are able to spend. This can help you to:

  • make decisions about your money, as you’ll know where it’s going and whether you have any left over
  • identify where you can make changes to your spending habits if you’re struggling to make ends meet 
  • make your money go further by getting into the savings habit if you have any left over

Budgeting involves setting money aside for rent or mortgage payments, bills, essential day to day spending, replacement household items and any loan or credit card repayments.

Paying late for loans or credit cards may affect your credit history.

A good credit history is important. It may affect your ability to secure private rented accommodation as many landlords will require a credit reference to be done.

Other companies may also look at your credit history if you apply to set up a Direct Debit, for example to pay a mobile phone contract.

Finally, budgeting can help you work out how to live within your means – giving you peace of mind.

Key points

Budgeting helps you:

  • Know where your money is going
  • Avoid or get out of debt and
  • Make savings and have more choices about what you do with your money

You only need to set aside a few minutes each week to look at your finances. Start by listing all your income, for example your benefits, tax credits or earnings.

Money coming in

You need to know exactly what money you have coming in. Check which benefits you receive and the amounts. You may need to check if you are having any deductions taken from your benefits.

If you are receiving wages your payslip will tell you how much you get. It also tells you how much you pay in Tax and National Insurance Contributions. You can check you are on the correct Tax code by contacting the Tax office or asking your employers HR department.

If you are not sure you are receiving all the benefits that you may be eligible for:

contact your local Job Centre Plus, Citizens Advice Bureau or see

Set up a savings plan with Credit Union. See community-bank

Secure employment. You will always be better off if you are working. You will have extra money coming in. If you are currently looking for work contact the Neighbourhood Employment Programme at programme

Other income 

You may have money coming in from other sources, for example from relatives, or rental income if you have a lodger or rent out a property you own.

You may find that your income varies from month to month, especially if your wages are based on the hours, you work or you get paid by commission. You may receive money in chunks, such as tax credits arrears payments or student loans that are paid out at the start of each term. If so, it could be worth working out your average income for each month.

Key points

  • Check your benefit payments
  • Claim any other benefits or tax credits you may be eligible for
  • Check your payslips is correct
  • Keep a spending diary so that you can see where your money is going. Try writing down what you spend each month
  • Don’t forget occasional items, like school uniforms, replacement household items

Money going out

Now you know what’s coming in, the next step is to find out how much is going out and plan your budget. Use the form included in this leaflet to work out what you have coming in and what you have going out.

Don’t worry if you can’t account for every penny coming in; the most important thing is to know roughly where you stand. Keeping a spending diary can help.

Don’t forget occasional items such as school uniforms and trips, birthdays, Christmas or other festive presents. Also think about other outgoings that you pay for once a year, for example car tax and insurance. It’s helpful to put in a monthly amount for these, perhaps by estimating and dividing up the average that you’d spend during the year.

Unexpected expenditure

If you experience unexpected expenditure, or do not receive benefits or money you were expecting, then in exceptional circumstances help may be available from Milton Keynes Council Local Welfare Provision. Phone 01908 253040 or go to

Keep track

Check your income and expenditure regularly. If your circumstances change, for example your benefits change, you get a pay rise or your bills increase, look at your budget again to make sure it’s realistic or that you’re making the most of any extra income.


Income Section A                                  £                                     

 Your pay after tax (net pay)


 Your partner pays after tax


 Child Tax Credits


 Child Benefit


 Maintenance you receive


 Job Seekers Allowance/Income Support    


 Employment Support Allowance/Incapacity Benefit  


 Disability Living Allowance


 Retirement pension


 Pension Credit


 Other state benefits


 Works pension/private pension


 Contributions from other adults living with you



 Total income  


  Total income from Section A


  Total spending from Section B      


  Income minus spending (A-B)



Contributions from other adults living with you                 




Total income


Contributions from other adults living with you




Total income


Contributions from other adults living with you




Total income


Contributions from other adults living with you




Total income



Broadband/telephone line  

Mobile Phone                                                                           




Total income


Credit cards


Car insurance /MOT/Servicing


Travelling expenses


House insurance


Pet expenses




Health expenses


Occasional items e.g. birthdays


Other loans


Eating out/takeaways




Total Spending



Managing your budget

Once you have worked out how much money you have coming in and going out, you’re in a better position already. If you haven’t got much money left over or you think you might be getting into difficulties, don’t panic – there is free help at hand.

Always make sure you pay your priority debts, for example, rent or mortgage, gas and electricity bills and Council Tax. If you’re struggling, it’s best to get in touch with those you owe money to as soon as possible. They may be able to set up an arrangement where you can spread your payments until you get your finances sorted.

Not much money left over?

If you find that you’re regularly struggling to make ends meet, you will need to reduce your spending. These tips may help.

Consider making small cutbacks on non-essential items. What could you do without to help you get back on track?

  • Avoid taking money from payday loan companies, doorstep lenders or getting items on hire purchase or credit. Companies that offer credit to people with bad credit charge very high interest rates which makes any item you are purchasing more expensive than normal.
  • You may get a better deal by switching services such as phones, electricity or gas to new suppliers. There are various internet switching services or search engines you can use.
  • Alternatively, speak to your supplier to find out if you qualify for a Warm Home Discount.
  • Don’t be tempted to upgrade your phone; look for a sim only deal. Some contracts can work out to be expensive.
  • If you are a BT customer on a low income and claiming means-tested state benefits, you may be able switch to their low-cost service, BT Basic. Contact BT for details.
  • Reducing the amount, you spend on non-essential expenditure such as eating out, Sky or mobile phone contracts

Getting into difficulties?

You may have the start of a debt problem if you find you are:

  • using credit (loans, doorstep lenders, payday loans and loan sharks) to pay bills
  • paying no more than the minimum payments due on your credit cards
  • using your credit card to take out cash advances
  • using your credit card to pay your rent or mortgage, or
  • borrowing money without planning how you’re going to pay it back. Even if it is from friends and family.

Think carefully about borrowing more money to pay off existing debts or to meet your day-to-day expenses. It could make things worse. If you borrow money and then are unable to pay your rent or mortgage you are at risk of losing your home.

In trouble?

If you find that the situation is spiralling out of control, try not to panic. Expert help is available. Several organisations offer a free service, either face to face, or by phone, for example, Milton Keynes Money Advice, Citizens Advice Bureau, Money Life Line, or National Debtline.

See the Organisations that can help section at the end of this leaflet.

 These advice agencies can help you tackle your debts. They will help you set up a budget sheet, prioritise your debts and work out how you can live with the income you have. If you are not able to pay your rent you should contact your landlord immediately. If you are a Council tenant in the first instance you should contact the Rent department on 01908 252937 to talk to them about your arrears.

Depending on your circumstances if you are having difficulty paying your rent you may be able to claim extra help. This is called a Discretionary Housing Payment. To apply for this you should contact Milton Keynes Council on 01908 253040 or go to

Don’t ignore the problem; talk to the people you owe money to. They may be able to help you manage your repayments. You may see adverts or get calls from companies offering to help you manage your debts. Beware though as they may charge a fee

Staying in control

If you’ve got some money left over, it’s time to get it working for you.

  • here are a few ways to get you started.
  • ensure you prioritise your bills such as paying your rent
  • paying off your debts
  • reducing your debts
  • saving up for furniture, school uniforms, or a deposit for a home, or

Work out a system to keep track of your spending in a way that suits you. You could keep a separate notebook or do it online. Consider:

  • making a calendar note of when payments are due, for example rent, council tax, TV licence, car tax and MOT. You’ll be better prepared if you know when they’re due. It could also help you avoid late-payment charges
  • looking at your bank and credit card statements as soon as you get them. Contact the bank or credit card company if you think anything looks wrong, and
  • checking your bank statements. If you are incurring bank charges for unauthorised overdrafts and returned direct debits you may need to speak to your bank or open a new account that does not incur these charges
  • reviewing your budget regularly. If your circumstances change, for example your benefits change or you get a pay rise or your bills increase, adjust your budget so you know where your money is going.
  • saving regularly if you have money left over after all your expenses, and your priority bills are paid, and any loans are at a manageable level. Consider putting a little aside each week or month.

You can save money in a bank, building society, credit union or by using National Savings and Investments. If you already have a savings account, check the interest rate you’re getting. You may be able to get a better rate by switching accounts or providers.

You can also save in savings schemes and clubs run by supermarkets, large retailers and local shops. This may be for Christmas hampers or gift vouchers. But with these options you’re not earning any interest on your savings, so your money isn’t growing, and your savings may not be protected.

Saving for emergencies

It’s a good idea to put some money aside for emergencies, or possible expenses such as replacing household items. The amount will vary depending on your circumstances. Keep it in a savings account that you can take money from at short notice in an emergency.

Shop around

You can get a better deal with your savings if you shop around first. You may be used to doing this for things like TVs, washing machines or other household goods.

Make sure you know exactly what you are getting, and that you are happy with the terms and conditions. It can be worth shopping around face to face on the high street, or by phoning around. Talking to someone in your bank about your particular needs can help, but make sure you ask them about the range of products they offer. Sometimes they can only sell or advise on their own products, so the range is limited

Key points

Remember ….

  • Your rent or mortgage payments are a priority to pay – if you do not pay these your home is at risk
  • Prioritise your payments accordingly
  • If you cannot pay for any reason, contact the person or company immediately – they may be able to help
  • Beware of taking out credit - high interest rates often mean you end up paying a lot more – it’s often better to save
  • Put some money aside for unexpected expenses
  • Keep a spending diary
  • Remember to review your budget regularly to make sure you’re living within your means, especially if there is a change in your circumstances.
  • Remember if you need help prioritising your debts or need some free money advice, there are specialist agencies that can help

Useful contacts

Milton Keynes Citizens Advice Bureau

0808 278 7991


Money Life Line

01908 550630


Milton Keynes Money Advice

01908 224580


National Debtline

0808 808 4000


Money Helper

0800 138 7777 


Swan Credit Union/MK Community Bank

03030 300147


Neighbourhood Employment


01908 252323


Job Centre Plus

0800 169 0190


Milton Keynes Council

01908 691691