1. What is a Household Budget?

A household budget is a financial plan that compares your income against your expenses. It helps UK families understand their financial situation and make informed decisions about spending and saving.

2. How the Budget Calculator Works

The calculator uses a simple equation:

Where:

• Income — Total monthly take-home pay after taxes
• Expenses — All monthly outgoings including bills, food, transport, etc.

Explanation: The calculator subtracts your total expenses from your total income to show how much you have left each month (or how much you're overspending).

3. Importance of Budget Calculation

Details: Creating a budget helps UK households avoid debt, save money, and plan for the future. It's particularly important with rising living costs in the UK.

4. Using the Calculator

Tips: Enter your monthly income after tax and all monthly expenses in pounds sterling (£). Be thorough when listing expenses to get an accurate picture.

5. Frequently Asked Questions (FAQ)

Q1: What counts as income?
A: Include all regular income sources - wages, benefits, pensions, and other stable income. Don't include one-off payments.

Q2: Should I include annual expenses?
A: Convert annual costs to monthly by dividing by 12 (e.g., £1200 car insurance = £100/month).

Q3: What if my budget is negative?
A: This means you're spending more than you earn. Look for expenses to reduce or ways to increase income.

Q4: How often should I calculate my budget?
A: Review monthly, especially if your income or expenses change. Many UK families check after payday.

Q5: Where can I get budgeting help in the UK?
A: Organisations like Citizens Advice, MoneyHelper, and StepChange offer free budgeting advice.