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Managing my money
Managing my money

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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)
EarningsTotal 1115Total 1115Total 1115
TOTAL NET INCOME 111511151115
Council Tax505050
Regular bills (gas, electricity, water, etc.)306050
Telephone (mobile and landline)404030
Home insurance (contents and building)121210
Household goods153030
Food and non-alcoholic drinks150150120
Clothing and footwear505040
Medicines, toiletries, hairdressing (personal)303030
Going out12012080
Holidays/other leisure2010050
Motoring costs (insurance, petrol)70130180
Birthday presents/charity/other gifts
Christmas presents/gifts104530
Personal loan repayments100100100
TOTAL EXPENDITURETotal 1017Total 1237Total 1090

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?

Jenny’s post-budgeting real net income and real expenditure profile, 2006–2020
Figure 11 Jenny’s post-budgeting real net income and real expenditure profile, 2006–2020

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.