In this guide, I look at what you should put on an Income and Expenditure Form. An Income and Expenditure Form is something you can use when you are making an offer to pay back your debts.
For example, you may be setting up a Debt Management Plan and one of the key things you need for this is an Income and Expenditure form. Below I look at some examples of the types of things you would put on an Income and Expenditure Form.
You need to put the details of any income you receive. Below is a table providing examples of the types of income you may receive.
|Income from your Employment.|
|Working Tax Credit.|
|Job Seekers Allowance.|
|Any Pension payments you receive.|
|Rent or Board you receive.|
|Any benefits you receive.|
|Income from Self Employment.|
|Any other money you receive on a regular basis.|
Your income is the money you bring in, and it is what you have to cover all your expenses including your debts, assuming you have anything left.
What expenses should you include on your Income and Expenditure Form?
The short answer is everything. However let’s break it down a little bit.
Your Priority Spending
Priority spending is spending on things that are the most important. So for example your mortgage or rent payments are important because fail to pay these and you are likely to end up homeless. Council Tax is something that is also classed as a priority payment and must be paid, because there are serious consequences should you not pay. Let’s look at examples of priority expenses.
|Priority Spending Examples|
|Rent or Mortgage Payment.|
|Service Charge or Ground Rent.|
|County Court Judgments or Decrees.|
|Hire Purchase Payments, for example on a Car.|
|Other Household Fuel.|
Your other spending
Other spending is spending you do on other things such as Home Insurance, education and transport for example. This is where you have to be realistic about what you put. So for example, if you spent £200 a month on nights out then you wouldn’t get away with putting that here. The creditor will most likely reject your offer of payment.
Let’s take a look at other spending examples.
|Building and Contents Insurance.||I pay £12 per month for this service and that's what I put on my Income and Expenditure.|
|Life Insurance or Pension.||I currently have a Pension and so I have put £50 per month for this. I could stop paying it and free up an extra £50 but I am not getting any younger so I have kept it as is for now.|
|Public Transport.||I don't use public transport but if you do, add up what you spend and enter that amount. Think about what you spend on the Bus, Train, Tram or Taxis for example and record that figure.|
|Medical or Accident Insurance.||I live life dangerously so don't have this. If you do, make sure you enter the amount you pay.|
|Household Appliance Rental||If you rent a washing machine for example, make a note of how much it costs.|
|Telephone and Internet||I do have a telephone and Internet Connection and it costs me £25 per month.|
|Satellite and Cable Television.||If you pay for a Sky Service or Virgin Media, record how much it is. Next ask yourself if it is worth it? I have got rid of mine to help pay a little bit more towards my debt. I would recommend at least looking into cancelling it. I can always watch stuff on the Internet in any event.|
|Tobacco.||Tricky one this. You can put it down but questions may be asked if the amount is very high. You could try giving up but being a quitter myself, I know how hard it is. I ended up switching to e-cigarettes instead, they are cheaper and stop me wanting to argue with people. Type smokerelief into the search box at the top right hand corner of this blog to find out more if you like. I spend about £25 a month on e-cigarette refills versus £150 a month on normal cigarettes.|
|Repairs and Maintenance.||Things such as heating cover, emergency repair cover. I rent my house so this is not something I pay for currently.|
|Laundry / Dry Cleaning.||I use my own washer, and I don't own anything nice enough to pay for it to be washed professionally. If you do record the amount here.|
|Education Fees.||If you pay for Education then make a note of the amount.|
|Church Contributions.||Yes budget for these too if you make them.|
|Union / Professional Fees.||If you are a member of a Union make a note of how much it costs so you can include it in your income and expenditure form.|
|Car Insurance||If you are like me and you drive, then you will have to pay car insurance. Make a note of how much this costs so you can put it onto your Income and Expenditure Form.|
|Road Tax||Remember to put away enough so you can pay your road tax when it is due for renewal. Divide what it costs by 12 or work out how much you need to save to pay for it next time round if it expires soon.|
|Breakdown Cover||If you pay for Breakdown cover make a note of the amount so you have it ready for your form.|
Your Living Costs
Your living costs are the costs associated with you actually living. So for example it will include things like food, prescriptions or dentist expenses. Below is a list of examples for you to look over.
|Food, Cleaning and Toileteries||Everyone has to eat. I have put down £200 per month for these expenses. I try and save what I can from this figure to pay extra towards the debts I have. This figure is for both my partner and me.|
|Hairdressing||Hair grows and so it needs cutting every now and then. Here I put £20 per month, that's not just for me by the way. It includes my partner too.|
|Dentist/Opticians||I set aside £20 per month for this.|
|Sundires/Emergencies||£10 a month is put away for those things that might catch you out.|
|Clothing and footwear.||£20 a month is put away in my own situation, so if you need some new clothes, you have the money available.|
|Medicines/Prescriptions.||I don't have any of these but if you do, be sure to make a note of them on your income and expenditure form.|
|Sports, Hobbies and Entertainment.||I am boring so nothing goes towards this. However if you do then put the amount here. Excessive amounts may cause you a problem so keep that in mind.|
|Petrol and Parking.||Make a note of how much you spend on petrol and parking then record this amount so you have it to hand.|
The above is a general guide as to which expenses you should put on your income and expenditure form. There will be things missing but the above should cover the main things. There is one last part to what you should put on your Income and Expenditure Form. Can you guess what?
The final piece of the puzzle is a list of your debts along with how much you owe and how much you are offering to pay towards them. The amount you are offering them is based on the following: -
Your surplus or spare income multiplied by the amount owed divided by your total debt equals the payment you make to that debt.
If you look at the first entry in the example table below you can see: -
I owe Happy Chocolate Loans Company £850.00
After all my expenses I have £518.00 available to pay my debts.
So I take my spare income of £518.00 and multiply it by how much I owe to Happy Chocolate Loans Company £850.00.
= £518.00 x £850.00
This gives me £440,300.00 divided by how much I owe to everyone £12,539.00
= £440,300.00 / £12,539.00
So my payment to this debt is £35.11
Below is what an example list of Creditors and the offers of payment would look like.
|Creditor||Debt Collection Agency||Balance Outstanding||Monthly Payment Amount|
|Happy Chocolate Loans Company||Wishful Thinking Debt Collection Services||£850.00||£35.11|
|Lemon and Orange Sauce Credit Cards||Forceful Debt Collections||£1,000.00||£41.31|
|We Lend to anyone Payday Loans||Buy for a little Collect for a lot Debt Services||£150.00||£6.20|
|Flexible and Fast Loan Services||Harassment Central Debt Services||£2,300.00||£95.02|
|Direct Store Credit Management||We Never Fordebt Collections||£450.00||£18.59|
|We Shouldn't Have Lent to you Loans||Happy to Pick up the Pieces Debt Services||£950.00||£39.25|
|Pile on the Charges if you Default Credit Cards||Debtville Collections||£456.00||£18.84|
|123 Happy Loans and Credit Cards||Not So Happy Collections||£82.00||£3.39|
|Rapid in your bank faster than the speed of light payday loans||Even Faster Debt Collection Services||£101.00||£4.17|
|Never Never Finance||Always Always Debt Collections||£5,400.00||£223.08|
|Last Chance Saloon Loans||We have been expecting you Debt Collection Company||£800.00||£33.05|
I have created an income and expenditure form as well as an offer of repayment letter. It is very basic but it does work and it is the one I currently use. Below are the links to get to these documents.
Need More Help?
Feel free to ask a question in the comments box below. Alternatively if you are struggling with debt and would like to talk to someone about it, please visit the Debt Help section on this blog.