Step 5 - Review expenditure

It is important to include all household expenditure and financial commitments in your statement, whether regular or irregular. Variable items such as fuel bills should be averaged out over the year and the use of budget plans, stamps or tokens may assist with this.

Creditors may challenge amounts spent on food, fuel, clothing, travel etc. so is there any way that you can reduce these to realistic levels in relation to the size and circumstances of your family? The cost of running a car may need to be justified against using public transport. For example, is it essential for travel to work, school, shopping etc. as other means of transport are not available? Leisure and holiday costs may also be challenged by creditors, along with expenditure on cigarettes, alcohol, lottery, pets etc.

Once again check your expenditure carefully to be sure that everything is included and all reasonable savings have been made. Try and make your expenses less than your income, otherwise your debts will continue to grow. However, do be realistic, as you may have to live on this budget for several years, so concentrate on reducing non-essentials rather than basics such as food and heating.

On completion of your income and expenditure review you can now finalise your financial statement before sending it to your creditors as part of your negotiations with them (see STEP 6 and STEP 7).

<<<Go back to step 4                                        Go to step 6>>>