HOW TO BUDGET

FIRST you should create a budget. This helps you monitor your total income and outgoings.

Take a paper and pen and write down all your household income (wages, benefits or pensions) a month. Add it all up. If you get weekly payments, multiply by 52 and divide by 12.

Tally all of your expenses for the year. Don’t forget less frequent payments, such as Christmas gifts and vet bills. Divide by 12 to get a monthly cost.

Subtract the expenses from your monthly income. If you have more money going out then coming in, you have a “budget deficit” and need to cut your spending.

To reduce your outgoings, visit a price comparison website and find a cheaper supplier for all of your bills – electricity, gas, phone, internet and insurance.

Use cashback websites to claw back some of your spending. When you make online purchases through one of these websites, a certain percentage of what you spend goes back to your account.

Online voucher codes can help reduce your spending. Switch to non-branded products.

Finally, and most importantly, if you are struggling, check if there are any benefits you can claim.

An estimated £10billion of pension credit, housing benefit and income support goes unclaimed every year.

If you do begin to get into debt, the most important thing is to seek advice early. Contact Stepchange or Citizens Advice.

● Stepchange is the UK’s leading debt charity. Call 0800 138 1111 or visit stepchange.org. Citizens Advice provides free and impartial advice on debt-related issues. Ring 03444 111 444 or go to citizensadvice.org.uk