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How to review your spending

Reviewing your spending is always a challenge no matter what your circumstances. The first step is to look at how you’re spending your money and then see if you can make some changes.  

Try to find any unnecessary spending and move this money to the areas you consider the most important. This may take some careful discussion with other family members to reach agreement. 

Track your spending 

Keeping track of your spending for a week or two will show you where your money is going. You might be surprised by what you’re buying and what you can do without.  

You can track your spending using: 

Think about what you spend 

Knowing exactly how much you pay for things means you can look for better deals on things like groceries (101 Square_Meals pdf), clothes, broadband and electricity. Use these money saving tips from the CCPC for more help on cutting back. 

Separate needs from wants 

Use the information from the My Budget tool and spending diary (pdf) to decide which things are your ‘needs’.   

Needs are the essential items you need to live, such as your accommodation or electricity. 

Wants are everything else or the things you could live without. You could choose to save the money you spend on these things, or you could redirect it to where you need it more.  

Think about what you want to do with your money before spending on your wants. By setting a goal, such as paying off a debt or saving for emergencies, you’re more likely to spend less.  

Break down your spending and save money 

Costs can be further broken down into: 

  • Fixed costs (remain the same every month, week or year)  
  • Variable costs (can change)  

Fixed costs are items of spending where you can do nothing to change the amount an item costs, for example, a TV licence. Variable costs are items of spending that you can change by taking action in some way, for example, energy costs.   

You can mark items on My Full Financial Picture or try using the worksheet below to help you sort out your essential costs.  

Example of how to list details of your spending 

Essential spending Non-essential spending
Fixed costs Mortgage, Rent, Car tax, Property tax, TV licence Gym membership 
Subscriptions to TV packages or newspapers
Variable costs  Food, Electricity, Gas, Oil, Coal, Car insurance, Life insurance Petrol, Clothes Gifts
Eating out

Work out if you have kept a reasonable standard of living 

When you are looking to live on a budget or want to reduce costs to tackle debt, there are certain protections we recommend you put in place for yourself and any family. You should have these as a bare minimum. These are: 

  • A roof over your head 
  • Food   
  • Heating 
  • Light  

However, financial security is more than just these bare minimum itemsPeople have to be able to live to a reasonable standard and to be able to take part in their community.     

Sometimes, you need to increase spending in some areas, for example, for food.  

In MABS, people often ask us about reasonable living costs for a family. Every household is different, and people on the same income can have very different circumstances.  

You can read more about reasonable living expenses

However, if you use these figures, remember they are only a guide. 

You may feel you can manage on less in some areas. However, beware of cutting the budget so tightly that there is no room for any enjoyment or to meet an unexpected cost.   

This calculator will work out the minimum standard of income and expenditure recommended for your household in response to a few simple questions.   

Tip: If you are aiming to tackle debt, especially priority debt, try to balance between: 

  • Making an effort to pay as much as you can afford so you avoid things like losing your home   
  • Taking care of your financial and mental wellbeing 

Get more help from MABS 

Learning to manage your money can seem difficult when you don’t have a lot to start with, or it is all spoken for, but help is always available. If you’re struggling to make ends meet, or you feel like borrowing more is the only solution, contact MABS

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