If you have debts, you’ll need to work out if you’ve got enough money to pay off what you owe.
To do this, you will need to work out how much money you’ve got coming into your household and how much you need to spend. This is called your budget. Once you’ve worked out your budget, you’ll be able to see how much you’ve got left over to pay off your debts.
Listing Your Income
The first thing you need to do to work out your budget is list all the income for your household. Be honest and make sure that the amounts are realistic.
The list of your income should include:
- Wages or salaries for your partner and yourself. Put in your net earnings, that is, after deductions. This should be the amount you regularly receive. If the amounts are different each month, average them over three or six months
- Pension money you’re receiving
- Any benefits you’re paid, including Child Benefit and tax credits
- Maintenance from an ex-partner for you or your children. Include any Child Support from the Child Support Agency
- Contributions from other members of your family and any lodgers.
Listing Your Expenses
The next thing you need to do to work out your budget is list all your expenses. Be honest and make sure that the amounts are realistic.
Under expenses, you should include:
- Include realistic amounts for what you spend on food, toiletries, school dinners and meals at work, cleaning materials, cigarettes, sweets, children’s pocket money and pet food
- Housing costs. This should include mortgage or rent, a second mortgage or secured loan, buildings and contents insurance, service charges and life or endowment insurance cover attached to your mortgage
- Gas, electricity and water charges
- Telephone charges
- Travel expenses. Include both public transport and the cost of running a car such as road tax, insurance, and maintenance
- Insurance that is not part of your housing costs (see above)
- Childcare costs
- Any other essential expenses, such as medical and dental expenses or support for an elderly relative
- Money you should set aside for unexpected events and contingencies. This includes saving for things like the replacement of essential household goods when they break down.
What To Do Next
Once you’ve listed all your income and expenditure, add up the figures and see if you’ve got any money to spare to pay back your creditors.
If you’ve got money to spare, you’ll need to work out how you’re going to pay off your debts. You will also need to:
- Sort out how much money you owe
- Work out which debts are the most urgent ones for you to pay off
- Deal with the most urgent debts as a matter of priority
- Look at your options for dealing with the less urgent debts
- Contact your creditors and make arrangements to pay back what you owe.
If you don’t have any spare money to pay off your debts, you’ll have a very hard task at hand dealing with your debt problem. But luckily you can take advantage of some legal options to get you out of this mess. We will be happy to assist you, just like thousands of other consumers that we have helped to get debt free since 2003.
You can take advantage of our debt settlement plan and if you are wondering what am I talking about, call us to get a quick assessment or fill out our online assessment form. You can be just a few clicks away to solve your financial problem and change your life completely!