How to budget for a monthly benefit payment

• Income Support
• Child Tax Credit
• Housing Benefit
• Working Tax Credit
• income-based Jobseekers Allowance
• income-related Employment and Support Allowance.

In England and Wales, Universal Credit will be paid in a single monthly payment to each household.

So if you currently work out your budget weekly or fortnightly, you’ll have to start looking at your incomings and outgoings across the whole month.

And if you’re using different benefit payments to cover set expenses, you’ll need to get used to having a single payment to cover everything.

Get an estimate of how much Universal Credit you’ll be entitled to – including how much better off you’ll be in work – with the calculator at Policy in PracticeOpens in a new window

Despite how daunting it might sound, a budget is just two lists:

1. Money you have coming in, such as your benefit payments and your salary if you’re working.
2. Payments you make, such as your rent or mortgage, heating bills and insurance, as well as living expenses and regular and irregular spending.

Look at the paperwork relating to any benefits and tax credits you get. Jot down the amounts you get. Make sure you make a note of whether these payments are weekly, fortnightly, four-weekly or monthly.

If you’re employed, check your payslips and jot down your salary – after tax and other deductions.

If you have any other income coming in, write down the amounts and how often you get them. For example, from a pension, child maintenance from your ex-partner, or self-employment income.

Don’t worry if the money you have coming in changes from time to time.

When you’ve made a budget, you can just adjust it without you having to start from scratch every time.

Gather together all the bills you pay so you can see the exact amounts. If your rent is currently being paid for you, be prepared to start including this in your budget soon.

The more exact you can be here, the better. For things like grocery shopping, it’s probably enough to look at how much you spend across a few weeks and work out an average. But for things like school uniform and other one-off costs, you’ll need to look at what you spend across the whole year and divide by 12 to get an average monthly amount.

Track down anything you pay on a regular basis such as home insurance, catalogue ‘buy now pay later’ payments and credit card payments and make a note of them.

This includes things like childcare, after-school clubs, and school trips. Some of these costs will be regular and others will be occasional so you’ll need to work out an average. If you have pets, add up everything you spend on their food, vets’ bills, etc.

If you have a car, make sure you include all the costs (including some like car tax – commonly known as road tax – that you only pay yearly or six monthly). If you use public transport, you’ll either need to include the cost of your season ticket or work out how much you spend on average per week or month.

Now you’ve gathered together all the paperwork and figures you need, the easiest thing to do is to put it all into our online budget planner.

It will take at least half an hour to fill it in. But it’s worth the time:

• You can put in figures for weekly or annual payments, for example, and it works out the monthly amounts for you.
• Even if you don’t manage to get it all done in one sitting, you can save it and come back to it later.
• If things change, for example you get an extra shift at work or your gas bill goes up, you can go back in and make changes without having to start it again.
• As soon as you find out how much Universal Credit you’re going to get, you can put your monthly payment in and see how that affects your budget.
• All the figures you put in are confidential – we won’t be able to see them or share them with anyone. And we’ve no way of knowing who you are, even if you register with us.

If you’re spending more each month than you have coming in, the next step is to look more closely at where your money is going and where you can cut back.

You might be able to get a cheaper deal on your phone or TV package.

Or you might find you’re paying more than you need to for your gas and electricity.

One of the advantages of moving onto a monthly budget is you can often sign up for cheaper tariffs if you pay monthly by Direct Debit.

Making a household budget is only the start.

Now you have to stick to it. This is easier said than done when prices are going up all the time and a one-off expense like a new pair of school shoes can threaten to derail it.

The important thing is you’ve taken the first step towards being in control of your money.

Now you know exactly where you stand. And even if things come along you haven’t budgeted for, you can go back into your budget, adjust it and work out a way to deal with it.