4 Essential Debt Busting Things To Do To Your Monthly Budget

Do you know how much you have spent so far this month? Not many people do. It’s easy to lose sight of where pay is going. Studies have suggested a 40% of our monthly spend is impulse buys. Impulse buys occur when we are hunting for a good price on something we have budgeted to buy. The retailer shows us a lot of other products they thing we would be interested in. That leads to a second unbudgeted purchase.
Debt Busting
Sticking to a budget requires enormous willpower and the right attitude. We have aspirations and want a lifestyle that is beyond our means. Remembering it’s ‘beyond our means’ is hard. The purchases we made on a whim that were beyond our means have given us debt – credit cards, store cards, overdrafts. Accept they have now become part of your monthly outgoings and check your new budget. You may need professional help and advice on how to get out of debt.

A typical budget includes the following items:

Accommodation: Rent or mortgage, plus power, plus water rates, plus any taxes, plus insurance. Include a token amount for emergency repairs.

Food and groceries: Everything you could buy in a supermarket including toilet paper, pet stuff, shampoo, food and cleaners.

Phone: Landline, broadband and cell phone

TV: Any paid for services or licence fee

Hobbies: Sports clubs, night classes, musical tuition and membership fees, etc.

Medical, Dental, Vets: Not funded by employer.

Going out fund: This is for nights out, days out, and the catering and travel costs associated with it.

Car: Insurance, licence or taxes, maintenance or MOT, higher purchase cost, etc.

Fuel for the car: What is costs you to do essential journeys to work, school and shops, etc.

Gift and Holiday fund: What you will save to cover cost of gifts and your annual holiday.

Other personal allowance: For each of you in the family, work out a reasonable sum of disposable income. This fund is to be used for hairdressing and salons, clothing, non-essential food stuffs (like candy and frozen yogurt), magazines, comics, books, DVDs, etc. Basically, anything you COULD do without if you really had to.

Your debt: Credit cards, store cards, loans, overdraft fees, etc.

If after totting up reasonable figures based on actual spending, check it falls within the household income. If it doesn’t, there are 4 things you could do:

  • Ask for a pay rise, or get a second job. Having another job will make you tired, it may only pay minimum wage, and it’s hard to be motivated when your salary goes on debts.
  • Cut down the spend. Cut your food and groceries down to only essential items, batch cooking instead of ready meals and use the Personal Allowance fund for treats.
  • Get rid of any TV or cell phone contracts that have run their course and use pay as you go services from your Personal Allowance budget (if you really need it and can still afford it).
  • Cut your Going Out fund down to a sensible level (maybe only twice a month for now) and temporarily cut out some of your hobbies until you are better off.

Denny Jones

Hey there, I'm Denny Jones, a seasoned financial writer with over a decade of experience. I'm passionate about simplifying finance and empowering readers to achieve financial freedom. My articles offer practical advice and insights to help you navigate investing, budgeting, and personal finance with confidence. Let's unlock your financial potential together!

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