A budget is a great tool to use to help you understand your financial situation, your income and your outgoings and where your money goes each week, fortnight or month. This is the first step towards sorting out your finances.

1. 

   Start with what you get paid. Then look at any other sources of income that you have (e.g share dividends and interest).

2. 

   How much do you spend on the following each month?

   • Rent or mortgage
   • Insurance
   • Utilities – electricity, water, gas, telephone
   • Rates
   • Car running costs, maintenance, other travel costs such as bus fares
   • Household groceries

3. 

   Reviewing your bank statements over the last few months is a good place to start.

   The Sorted Cashflow Calculator and The Sorted Budget Calculator are excellent tools to help you do this

4. 

   Look for small non-essential items that you can easily cut, then prioritise your expenses:

   • Pay the most important bills first – i.e. think about needs versus wants, and the things you and your family actually need on a day-to-day basis.
   • Think about which bills are going to get bigger in the long run – for example a mortgage, credit card or personal loan.

5. 

   It’s worth checking if you qualify for any allowances with Work and Income. Check out Working for Families or phone them on 0800 774 004.

6. 

   Budgeting’s a bit like dieting or exercising. If you just jump into it, the results are great in the short term but you can easily end up back where you started. That's because, just as with diets and exercise, you need a plan you can stick to. For more on this, check out the Family Budgeting Services website.

   If things are very tight, and you can’t see a way to reduce your expenses, an independent budget adviser will be able to review your budget with you. They may have some other ideas and options you may like to think about.