When the bills are piling up.

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These days, budgeting really counts – for many of us, more than ever. The more strain your finances are under, the more important it is to make the best possible use of every penny.

The obvious place to start is by finding out where you stand: how much leeway you actually have in your monthly budget. Once you know that, you’ll be better able to figure out what to do next. (This article just takes a brief look at the subject – if you want to know more about bills, debts and budgeting, you might find this is an interesting bit of information.)

So, calculate what’s coming into your account every month. For most people, this isn’t too tricky, as we don’t have as much income coming in as we’d like to have!

Next, what’s going out? This is typically far more complicated, for all kinds of reasons – not just because we tend to spend our money on a wide range of things, but because they’ll vary from one month to the next, while some bills are paid monthly, quarterly, yearly…

If you’re carrying unsecured debts right now, you’ll need to know how much money you have available to go towards them once you’ve accounted for all your essential expenses. This figure’s called your disposable income – it’s the amount of money left over once you’ve paid for the things that you just can’t live without, from heating and eating to keeping a roof over your head.

At the end of the day, if you can afford all your essential costs and the cost of repaying your unsecured debts, it sounds like your finances are on track. If you’re in this kind of situation and the bills are still piling up, it could be that you just need to take a more rigorous approach to your budgeting.

You may even be able to overpay your debts – make more than the minimum required payment on a monthly basis to get them paid off more quickly and (potentially) save yourself a fair bit in interest. (Just make sure you’ve read the terms first – some debts will impose an Early Repayment Charge if you repay them more rapidly than you actually agreed to.)

Alternatively, you might find it makes more sense to save up for a rainy day instead. It depends on where you stand with your finances, what kind of debts you’re paying off, how much interest they’re charging you, how much interest you could get on your savings, whether it makes more sense to focus on overpaying your mortgage right now, what your future is likely to involve, etc.

If you can’t afford all your costs, the situation’s much more worrying. Unless you can find a way to cut down on your spending and/or increase your income, you may need to contact your lenders and arrange a new repayment plan of some sort. This isn’t always straightforward – so getting some debt advice is a good way to start.