Our Advice Centre is open today from 10:00am – 5:00pm
A guide to budgeting
What is budgeting?
Budgeting is a way for you to organise your finances where you record your income and outgoings and create a plan to manage your finances. The goal is to make sure you’re living within your means, saving for the future and avoiding unnecessary debt.
Budgeting is especially important to do when you’re young, as it can help you to plan for and take control of your future, as well as learn skills that you can use and apply to other areas of your life.
How to create a budget
Start by recording your income and outgoings
Your income is any money you receive, including from a job, benefits, student finance or from being self-employed. Note down how much you get and how often it comes in.
Your outgoings can be categorised into two parts – fixed outgoings, which are costs that stay the same, like rent, tax and your phone bill, and variable outgoings, which are costs that can change price, like your electricity and food shopping. Take a look back at the last two or three months to get a picture of what you usually spend for your variable outgoings.
Identify any debts that you have
Split your debts into priority debts and non-priority debts.
Priority debts are ones that can cause problems like affecting housing or result in legal proceedings if nothing is done about them. Examples are your rent, utility bills, council tax or court fines.
Non-priority debts are ones that are owed but do not carry immediate consequences, like credit cards, water arrears, overdrafts or money borrowed from family and friends.
Create some short-term and long-term financial goals
Short-term goals can be things like aiming to spend less in the next week by making your own lunch instead of buying lunch out, or not spending so much on non-essential items and services.
Long-term goals can be things like planning to have a certain amount of debt paid off by a certain point, or putting left-over money each month in savings to go towards a holiday.
Monitor and adjust
Make sure you keep your budget up to date, making changes when costs change. If you notice you are spending more than what you are getting in, you may want to look at what your money is going on and think about how you can cut back so you don’t end up in debt, for example what non-essentials you can do without, or whether you are entitled to any other financial support that you’re not yet claiming.
Budget template
We have created a budget template to help you manage your finances. This template can be downloaded and used on a device, or can be printed off.
If you’re using the template on a device, the template will work out the totals for you so you don’t have to do the maths.
If you need any support filling in your template or with your finances, drop-in to our Advice Centre where our youth workers will be able to give you a hand.
Download
Budgeting tips
Find a method that works for you
Popular budgeting methods include the 50/30/20 rule, where 50% of your income goes to needs (housing, utilities etc), 30% to wants (entertainment and leisure) and 20% goes on savings and debt repayment, or the envelope system, where you allocate an amount for categories (like groceries and entertainment) and once it’s gone, there’s no more spending in that category.
Gather information
Before you start, collect all paperwork like letters and bank statements to make sure you are entering everything accurately.
Consider what banks you use
Budgeting banks like Monzo, Starling Bank and Revolute can help you to visually see the budgeting and organise your money.
Be honest
Be honest with yourself on your budget and don’t forget to include one-off spends.
Savings
Add savings to your budget to avoid overspending and ensure that some is put away.
Paperwork
Keep your paperwork – you never know when you’ll need it. Create a folder and label each section for each bill. Every now and then you can go through and dispose of letters that are too old.
Support
Don’t put pressure on yourself to solve everything instantly and remember that getting support from organisations like No Limits can help you.
Different types of financial support
If you need support with applying for or receiving any of the following, youth workers at our Advice Centre will be able to help you.
You can also use a benefit calculator to identify what you could be entitled to. It can also be used when you’re planning on moving to help you predict what you will be able to afford when you move. A couple of good calculators are:
Entitled To – entitledto.co.uk
Turn2Us – benefits-calculator.turn2us.org.uk
Universal Credit is a means-tested benefit for people who are on low income. It’s available whether you are in work or out of work. It can include amounts for housing, the cost of raising children, disabilities or being a carer. The ones you receive depend on your circumstances.
Universal Credit replaces six means-tested benefits called legacy benefits:
– Income support
– Income-based job seekers allowance (JSA)
– Income-related employment and support allowance (ESA)
– Housing benefits
– Child tax credits
– Working tax credits
More information can be found on the Government website here.
PIP can help with extra living costs if individuals have both:
– A long-term physical or mental health condition or disability
– Difficulty doing certain everyday tasks or getting around because of their condition.
Individuals can get PIP even if they are working, have savings or are getting most other benefits.
Individuals can claim child benefits if they are responsible for bringing up a child who is:
– Under 16
– Under 20 if they are in approved education or training
Only one person can get child benefits for a child, but there’s no limit to how many children can be claimed for. Child Benefits are usually paid every four weeks on a Monday or Tuesday. Money can be paid weekly if you are a single parent or are getting certain other benefits, such as Universal Credit.
Want to talk to No Limits?
Advice Centre
Youth workers at our Advice Centre can help you six days a week with anything to do with budgeting, debt and benefits, as well as being able to support you with anything else you’re going through.
Find out more
Phone line
Our youth workers are also available through our phone line, open at the same times as our Advice Centre.
Call 02380 224 224 (option 1)
Other organisations that can help
Citizens Advice – citizensadvice.org.uk / 14-15 Brunswick Pl, Southampton SO15 2AQ
Southampton Advice and Representation Centre (SARC) – sarc.org.uk
Turn2Us – turn2us.org.uk
Step Change – stepchange.org
