Managing my money
Managing my money

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Managing my money

3.3 Jenny’s spending and her goals

In this week, you reach ‘first base’ in managing your money – control over your income versus spending – and linkage of your finances to your life’s ambitions and goals.

When all the options have been weighed up and the necessary adjustments have been made, the final result is a budget showing planned expenditure and income for the following month(s).

In Jenny’s case, after making all of her adjustments to the pattern of her expenditure, her budget might look something like the third column in the table. By listing the budget together with her starting position, it’s easier to see the changes Jenny is planning to make. The new overall difference between income and expenditure is at the bottom of the budget.

Table 3 Jenny revises her spending

Cash flow (£ per month) Average month (£ per month) Budget (£ per month)
NET INCOME
Earnings Total 1115 Total 1115 Total 1115
TOTAL NET INCOME 1115 1115 1115
Rent 250 250 250
Council Tax 50 50 50
Regular bills (gas, electricity, water, etc.) 30 60 50
Telephone (mobile and landline) 40 40 30
Home insurance (contents and building) 12 12 10
Household goods 15 30 30
Food and non-alcoholic drinks 150 150 120
Alcohol 40 40 40
Tobacco 30 30 0
Clothing and footwear 50 50 40
Medicines, toiletries, hairdressing (personal) 30 30 30
Going out 120 120 80
Holidays/other leisure 20 100 50
Motoring costs (insurance, petrol) 70 130 180
Birthday presents/charity/other gifts
Christmas presents/gifts 10 45 30
Personal loan repayments 100 100 100
TOTAL EXPENDITURE Total 1017 Total 1237 Total 1090
SURPLUS/DEFICIT 98 -122 25

Compare Jenny’s budget (shown in the budget column) with her previous pattern of spending (shown in the average month column) in the table. What things is she spending more on, and what is she spending less on? Do you think this budget will help her to meet her goals?

Figure 11 Jenny’s post-budgeting real net income and real expenditure profile, 2002–2016

The impact of Jenny’s decisions can be seen in the graph, showing her moving from a deficit to a surplus on her budget, which she intends to maintain in the future.

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