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How do I calculate my monthly living expenses?

  • Sharon McDougall -
  • 31st October 2021 -
  • 5 minutes to read

If you’ve entered into a Scottish trust deed or any other personal insolvency procedure, and are worried about how you’re going to manage the bills, making a budget is one of the most important steps to take. In fact devising a workable budget is a useful exercise for anyone whether they are dealing with debt or not. It is only by knowing where your money is going every month that you can highlight areas where savings can be made.

Although creating a budget takes a little time and effort, once done it will make your finances much easier to manage, and can literally transform your outlook on life during this stressful time.

So let us help you build a budget that keeps you in control, ensures sure you have enough money for life’s essentials, and prevents you sliding into further debt.

A detailed budget is the key

The first step in making a budget is to collect together all your household bills for the past year, as well as bank statements and receipts for your living expenses. We have also included the amounts set by Insolvency Practitioners/Trustees when creating a budget for trust deed clients. For those entering into a trust deed, these are the maximum limits allowed per category; if you are not in a trust deed then you are obviously not bound by these limits, although it may be useful to use these as a rough indication of what you should be spending in each category.

Here’s what you’ll need to include in your budget:

Mortgage/rent payments

Multiply a weekly rent by 4.33 to arrive at the figure you’ll need to include in your monthly budget.

Electricity and gas

Energy costs can be difficult to calculate as they vary over the months, so the best way to approach this is to work out how much you’ve spent on energy in the past year. You can then divide this figure by twelve to reach your average monthly payment.


Water bills can be paid monthly, half-yearly (divide your bill by six) or once a year (divide it by 12).

Council tax

Payment options for council tax are generally once a year, or over 10 or 12 equal instalments. While paying over 10 instalments and having two payment free months a year is tempting, spreading the cost over a full calendar year could ease your cash flow and make budgeting easier.

Home insurance

All mortgage lenders require buildings insurance, but it’s also important to have contents insurance in the event of a fire, or burglary for example even if you are in rented premises.

Landline, mobile and internet provider

The general limits set by insolvency practitioners for the purposes of a formal insolvency agreement are:

£46-£54 single person

£57-£70 couple, no children

£6-£7 for each child

You’ll also need to include the cost of your TV licence which is £12.87 per month if you pay by direct debit.


This category includes the cost of food, as well as cleaning products and toiletries. Insolvency practitioners use the following figures to determine a realistic budget for a client:

£100-£200 single person

£185-£325 couple, no children

£55-£80 for each child

These figures may seem much lower than you are used to, but there are a multitude of ways you can cut down on your grocery bill. Creating a meal plan for the week before you head out to do your food shop can ensure you are not buying food you will not eat; also cooking in bulk and freezing the leftovers can not only save you money but can also be a great time-saver after a busy day.

Meals at work and school

In addition to the above, you will also need to budget for meals eaten at work or during school hours. Recommended figures are £36 for each adult and £35 per child per month.

Clothing and footwear

When devising a budget for a potential trust deed, clothing and footwear are considered luxury items, and therefore a low monthly amount is allowed. Current figures are:

£12-£30 single person

£22-£47 couple, no children

£9-£13 for each child

These figures do not give much leeway for buying much more than the bare essentials. You can make your money go further by scouring second-hand or charity shops, looking online particularly places like eBay for quality used clothing, or seeing what budget retailers have to offer.

Travel and transport

If you travel by public transport to work, multiply your daily cost by the number of days you travel during the month. Car owners will need to factor in a range of costs, including:

  • Petrol: (Advised cost of no more than £130-£167 per month)
  • Road tax: (Advised to be no more than £17 per car each month)
  • Car insurance: Divide your annual premium by 12 to come to a monthly figure which can be used
  • Maintenance: This is to include wear and tear on your vehicle, as well as servicing and MOTs. It is advised you budget £22 per car per month for this.

Travel to school by public transport can also be included. To arrive at an accurate monthly figure, take the daily cost and multiply by five, multiply this figure by 38 (the number of weeks in an academic year), and then divide by twelve to reach your monthly budget figure.


Insolvency practitioners will generally no allow the combined cost for food and pet insurance to exceed £23 per month, although you may be able to negotiate a higher figure if you have more than one pet.

Childcare and child maintenance payments

Paying weekly for childcare or child maintenance means you need to multiply the figure by 4.33 to reach an accurate monthly amount.

Rental of white goods/TV

Budget according to the figure on your contract.


The limit for prescriptions equates to one prescription per month, and for dental and optical treatment it is:

£14 single person

£15 couple, no children

Home maintenance and repairs

This should cover the cost of emergency plumbing, for example, or servicing/maintenance of your boiler:

£15 single person

£25 couple, no children


A very small budget is allowable for entertainment/hobbies:

£11-£17 single person

£16-£22 couple, no children

£6-£11 each child

Contingency for emergencies

A pot for minor emergencies and unexpected costs such as having to take a taxi rather than the bus, should also be included in your budget.


Miscellaneous items could include buying a newspaper, or the cost of laundry/dry cleaning. Limits are set at:

£10 laundry/dry cleaning

£5 newspapers and magazines

For more help in developing your budget, call one of the team at Scotland Debt Solutions. We work to help Scottish residents escape debt, and have five offices around the country.

Sharon McDougall
Sharon McDougall

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