If you are applying for a Debt Management Plan (DMP) you will need to complete a monthly living expenditure budget. The total of this budget is deducted from your income to calculate the amount you should pay into your Plan each month.
It is very important to get this budget right. If you underestimate the amount you spend or miss expenses out all together your total budget will be too low. This will make it look as though you can pay more into the Plan than you really can.
What items can be included in a Debt Management living expenses budget?
You should include all of the items you need to run your household in your living expenses budget. Some of these will regular payments which you can easily identify from your bank statement. Things like your mortgage or rent payments, your council tax payment and your utility bills.
Other items are not so easy to identify as they may be made up of multiple payments which vary from month to month. For example your food and petrol budgets. In addition some items are easy to miss as they are not paid regularly. These include things like car maintenance and amounts for dental and optical expenditures.
Get a copy of our Debt Management Living Expenses Guide
To get an accurate view of which types of expenses you should include in your debt management plan Living Expenses Budget and the amounts you should be spending on each you should get a copy of our living expenses guide.
The guide is free and lists all of the different types of expenditures you should consider. It also gives hints and tips about the budgets which you will have to stay within to ensure that they are acceptable to your creditors.
To get the guide please use the “Download Living Expenses Guide” button top right of this page or (at the bottom if you are using your mobile).
How to use the Debt Management Plan Living Expenses Guide
When you use the guide to help you put together your living expense budget you may feel that some of the figures seem restrictive. Despite this they are known to be generally accepted by creditors and so if you want your Plan to be agreed you should try stay within the budget figures shown for each category.
Having said that as its name suggests the guide MUST be used for guidance purposes only. Every individual’s situation is different and the actual figures acceptable to your creditors in each category may be higher or lower than those indicated depending on your circumstances.
BE Tip: If you feel that you need to spend more than the recommended amounts you should always include these figures in your budget. However you must be prepared to justify any additional expenditure and understand that you might be asked to reduce these before your creditors will agree to your Plan.
Once you have put together your living expenses budget you should speak to one of our experts who can help you decide whether or not it is reasonable and if a DMP is a sensible solution for you.