A budget provides a great way to see if you are spending more each week or month than you receive or earn.

Sounds great, but how do I do it?

The easiest way to start is to make a diary of your spending, in which you write a note of everything you have bought for the month. This will show you exactly where your money is going and may highlight a few areas where you can easily cut back. This often throws up some surprises and you may well be shocked at where your hard-earned cash goes!

The next stage is to calculate just how much cash is coming in. Write down any benefits claimed, your salary from work and details of any other regular income you may receive.

Categorize your expenditure into three groups:

• Essential – these are the items on which you have to spend money every month, such as bills and rent
• Everyday – this will cover medication, travel fares, food, essentials for children and so on
• Occasional – meals out, clothes, birthdays and any other casual expenditure

Once you have your spending broken down into these groups, ask yourself if you have covered absolutely everything you spend weekly or monthly. Check to ensure there are no costs that may have been left out. You can check this quite easily by adding everything on the list and seeing if this seems to tally with the amount you spent the previous week or month.

If you appear to be spending more than your income, you may wish to consider consolidating debts with the objective of reducing your fixed monthly out-goings. With this in mind, it may be a good idea to consider taking out a loan for this purpose. Even if your credit history is less than ideal, some bad credit homeowner loans may be available to you for consolidation purposes, with lenders prepared to look at each case on its merits.

Budgeting for a family

It can be expensive to raise a family, but there are many tools available to assist you with keeping control of your finances. Once your budget is built, emergency cash for items such as childcare or illness can be added. Small changes around the home can also help, such as planning the meals for the week on Sunday. This will mean that any left-overs can be used during the week. Shopping online for food is another good idea. You can search for offers and will not be tempted to fill your trolley with items that you hadn’t planned to buy.

Already over budget? Don’t worry!

If the money you are spending is already more than the money you earn, what should you do? After making a note of everything you spend weekly or monthly, decide if there are items on there that can be replaced by cheaper alternatives or whether there are things that you don’t really need. Could your phone be on a cheaper tariff? Could you reduce your TV viewing package? Could you pay for bills by direct debit and receive discounts?

If there really are no changes that can be made and your debt situation is serious, you may wish to consider that loan. With many bad credit homeowner loans, even borrowers with adverse credit histories can be accommodated. You can thus consolidate debts, creating one manageable payment to build into your budget plan, starting you back on the road to financial security.