How to budget when money is tight

Budgeting when you are in debt is fundamentally about certainty — knowing what comes in and what must go out. A clear budget protects you from surprises and helps you decide what to negotiate.

Start with income

List every source of money, normalised to a monthly figure:

• Wages (including variable income — average 3 months)
• Benefits and tax credits
• Child benefit
• Maintenance received
• Side income (e.g. selling items)

If your income is irregular, use a 3-month average so you don't plan around an unusually good month.

List your priority spending first

• Rent or mortgage
• Council tax
• Utilities (gas, electricity, water)
• Food basics
• Travel to work
• Insurance (only if legally required, e.g. buildings if mortgaged)
• Phone or internet essential
• TV licence if you currently pay it
• Prescriptions
• Minimum debt repayments on priority debts (court fines, council tax, HMRC)

Then deal with non-priority debts

After essential living, split what's left for credit cards, loans and catalogues. Be honest about what's affordable — paying too much now means relying on credit later.

How to track

• Try the envelope method (digitally): separate accounts for bills and spending
• Set up Faster Payments the day after payday so necessary money is locked
• Set a weekly spending check-in — 10 minutes every Sunday

The £5 rule

If a non-priority debt payment leaves you with less than £5 weekly for food basics, reduce the debt payment and tell the creditor. They prefer structured arrangements that last over monthly big payments that fail.

Use the Surplus Calculator

The Debtrupt Surplus Calculator (in your dashboard) automatically normalises all income, expenses and debts to monthly figures and recommends immediate next steps.

Stress-test your budget

After writing your budget, ask: what happens if my pay drops 10%? Identify the two expenses you could cut first — that simple plan will help you react calmly if things change.

A note on shame

Budgeting is a skill, not punishment. Whatever number comes out — surplus, deficit, or break-even — you now have information. Information is power. See Where to find free UK debt advice for a second opinion.