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Get control of your finances by setting up a budget, and learn more about debts, including different kinds of debt and what causes debt.
Whether you're trying to avoid debt or find your way out of it, budgeting is the foundation of good money management.
If you’d like some extra help getting started with budgeting, we’re here to help. Contact us now via My Account and ask for our money advice team, who’ll be able to give you advice and send you budgeting tools and plans to help you avoid debt and stay on track with your payments.
Budgeting is when you set aside a specific amount of money for certain expenses and track how much money you have coming in versus how much you’re spending.
Creating and sticking to a budget is one of the best ways to help you stay in control of your finances. It can make a big difference to your financial wellbeing and help you feel more confident about managing your money.
Setting up a budget can help you:
● avoid getting into debt
● save up for important goals or unexpected costs
● make your money go further
● improve your financial wellbeing
● help you feel more confident about managing your money
If you're ready to take charge of your finances, setting up your own budget is a great idea.
We recommend these free tools from MoneySavingExpert and MoneyHelper to help you get started tracking your income and expenses.
Budget planner on MoneySavingExpert
Debt happens when you owe money to someone else. That might be in the form of unpaid bills, a loan you haven’t repaid yet, or other financial commitments like credit and store cards.
Debt can affect anyone at any time, and can cause big problems if it’s ignored or not dealt with properly. That’s why it’s important to understand how it happens and what types there are.
Always pay your bills on time, and don’t take on more debt than you can afford. You can work out if you can afford to take on a debt by making a budget planner.
If you do take on a debt, make sure you have a plan to pay it back. Always check you understand exactly how much you’ll owe, who you’ll need to repay and when you need to do this by.
There are many reasons people fall into debt, including:
● spending more than they earn
● missing payments or falling behind in bills
● a change in circumstances, like illness or unemployment
● not understanding how to manage their money
● poor budgeting habits
● ignoring the problem and hoping it goes away
Being aware of these risks is the first step toward protecting your financial health.
There are lots of different kinds of debt.
● Household bills - rent, mortgage, council tax, TV license, and utilities like gas, electricity and water
● Personal debts - loans, credit cards, overdrafts and bank charges
● Government or legal debts - income tax, court fines or orders
● Family debts - child maintenance or loans from family members
● Educational debts - student loans or college fees
● Other debts - catalogue payments, mobile phone contracts, or hire purchase agreements
