Taking stock of your situation

Drawing up a Budget Plan

You can download a sample Budget Planner from our budget planner & letter templates section or follow these simple steps to help you draw up a budget plan.

1. Write down your net income (salary and wages after tax and National Insurance), plus any benefits, pensions, contributions and other forms of income you receive. As your lenders generally work on a monthly rather than weekly basis it's best to adjust your figures to monthly amounts - even if you're paid weekly, as this will avoid confusion when writing to them.
2. Now write down all your day-to-day expenses and priority bills. If you are unsure which your priority bills are, the next section on prioritising your debts will help. Don't include any of your unsecured lender repayments at this point. If you share the bills with other members of your household, their contribution or earnings should also be included.
3. Add up your total income then add up your total expenditure. Subtract your spending from your income and what's left is the money available to put towards your unsecured debts.
4. Write down all your unsecured debts and the monthly repayments to each. Does the amount left over after subtracting your expenditure from your income cover the monthly repayments? If not, you will need to review your finances.

If your budget plan indicates that you have a problem it's important to inform your lenders as soon as possible, explaining your situation. Your lenders should be sympathetic to your position and it will demonstrate that you're taking your debts seriously.

The section on dealing with your lenders explains what to do in more detail and you can download sample letters from our budget planner & letter templates section.