Our budget calculator takes a large number of your financial details into account, then helps you budget your life effectively considering your current income. Keep reading to see how our budget calculator works.
How to use our budget calculator
Our budget calculator considers dozens of different factors, because managing our daily lives and finances requires many different considerations. That said, here are the most important steps when using our budget calculator:
- Enter your income information.
- Enter the benefits you receive, such as child tax credits, working tax credits, or maternity allowance.
- Enter the debts you’re paying back.
- Enter your monthly bills.
- Enter your household expenses (for example grocery shopping, medications, etc.).
- Enter your family- and pet-related expenses (for example school supplies, dog food, etc.).
- Enter your leisure-related costs.
- Enter your transportation-related costs (for example public transit, taxis, etc.).
- Enter your car-related expenses.
- Enter the amount of money you contribute to your savings or investment plans.
- Click calculate.
How the budget calculator works
Our budget calculator is a balance sheet that tallies up all of your income and all of your expenses, then determines whether your current financial situation leaves you in the black or in the red and helps you work out a better way to budget your income.
Why should I use it?
Everyday life can keep us busy. Between handling everyday expenses and managing unexpected ones, we may not realise how much money we need to have on hand to take care of all our individual and family needs. By using our budget calculator, you can create a budget that makes sure you’re not overextended yourself and falling into debt. This will help you make more responsible decisions, helping both your financial future and your peace of mind.
What to consider when budgeting
Here are a few factors to consider when putting together a budget:
- Long-term goals. A few pounds one way or another per month might not matter much now. But if you’re actively working toward a goal (such as paying off credit card debt or saving for a big purchase), being more disciplined about what you spend gains importance.
- Stress. Some people can manage just fine mentally while dealing with debt, while others can become demoralised by it. If you fall into the latter group, it will make sense to cut back on spending so you can at least break even (or move ahead) every month.
- Extraordinary circumstances. Is your life filled with unusual circumstances that lead to big expenditures, such as an elderly relative or pet who keeps having major health setbacks that cost money to address? If so, you should create more wiggle room in your budget to account for that.
- Changing circumstances. Are you in a relationship and thinking about cohabitating with your partner? Or maybe you’re considering having your first child? These changing circumstances can have major effects on your financial situation, so make sure you budget accordingly.
- Age. When you’re younger, it can make sense to be more aggressive about budgeting, such as being more aggressive in how you invest with an eye toward future prosperity. On the other hand if you’re retired, you’re no longer receiving regular income and need to be more conservative in how you budget. Adjust accordingly based on your age.