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Staying on top of your finances
The importance of budgeting and prioritising
- It is important to keep track of your finances.
- Keeping a budget may not be the most exciting of tasks but it is the first step to being in control of your money. A budget will help you see how much you have coming in and where that money goes every month.
- The key to doing a successful budget is to be honest and not underestimate anything or leave anything out.
- The moneybasics Budget Calculator can be accessed here.
- If however, you're unsure of which bills or debts to pay first, then see below to understand how important it is to prioritise your spending.
What is a priority?
A priority is something you should give special attention - or is a main concern.
In terms of your budgeting and spending, this means identifying the bills, payments and debts which are most important to pay, and paying these first before paying any others. Priority is not determined by how big the bill or debt is, or the amount of time the debt has been outstanding, but rather it is determined by what will happen to you if you don't pay. Below is a list of the consequences of not meeting payments – this is what makes the bills and payments a priority to pay.
A priority is something you should give special attention - or is a main concern.
In terms of your budgeting and spending, this means identifying the bills, payments and debts which are most important to pay, and paying these first before paying any others. Priority is not determined by how big the bill or debt is, or the amount of time the debt has been outstanding, but rather it is determined by what will happen to you if you don't pay. Below is a list of the consequences of not meeting payments – this is what makes the bills and payments a priority to pay.
| Type of debt, bill or payment | Consequence of not paying |
| Mortgage / Rent (or secured loan) | Repossession / Eviction |
| Gas and Electricity | Disconnection, or fitting of a prepayment meter |
| Council Tax | Taken from wages/benefits; bailiffs; imprisonment |
| Child Support or Maintenance | Taken from wages/benefits; imprisonment |
| Magistrates Fines | Bailiffs; Imprisonment |
| Income Tax and VAT | Bailiffs; Bankruptcy; Imprisonment |
What comes next?
After you have paid the priorities listed above, you should pay any secondary debts or bills. These include:
After you have paid the priorities listed above, you should pay any secondary debts or bills. These include:
- Credit Cards
- Store Cards
- Bank loans or overdrafts
- Unsecured personal loans
- Pawnbrokers
And after that?
From your weekly or monthly budget you will see where the rest of your money is being spent.
If you are struggling to pay your priorities, as listed above, it is probably time to see if you are prioritising areas of spending which are not essential.
Some examples of these areas are listed below; can you cut down the amount you spend?
From your weekly or monthly budget you will see where the rest of your money is being spent.
If you are struggling to pay your priorities, as listed above, it is probably time to see if you are prioritising areas of spending which are not essential.
Some examples of these areas are listed below; can you cut down the amount you spend?
- Sky or Virgin TV package
- Expensive mobile phone contracts or topping up too much
- Buying lunches or coffees at work
- Overspending at Christmas and birthdays
- Weekly food shop - can you switch to own brand products?
For further tips on how to reduce your spending, see our top tips.
Further Information
If you are worried about debt you can speak to a Consumer Credit Counselling Service counsellor on 0800 138 1111 or try the CCCS Debt Remedy for free debt advice to suit your individual circumstances.
Take a look at the FSA's Financial Health Check and find out tips for a healthier financial lifestyle - now and in the future.
Try the FSA's Debt Test to help you to find out if you have - or are likely to have - problems with your borrowing.
Credit Action has a great booklet called Dealing With Debt, which can be read online or downloaded for free, just by clicking here.
Further Information
If you are worried about debt you can speak to a Consumer Credit Counselling Service counsellor on 0800 138 1111 or try the CCCS Debt Remedy for free debt advice to suit your individual circumstances.
Take a look at the FSA's Financial Health Check and find out tips for a healthier financial lifestyle - now and in the future.
Try the FSA's Debt Test to help you to find out if you have - or are likely to have - problems with your borrowing.
Credit Action has a great booklet called Dealing With Debt, which can be read online or downloaded for free, just by clicking here.
Related Links
In debt and need help?
Call a CCCS counsellor on 0800 138 1111.
