1. What is the Budget Calculator?

The Budget Calculator UK helps households calculate their monthly budget surplus by subtracting expenses from income. It provides a simple way to assess financial health and plan for savings.

2. How Does the Calculator Work?

The calculator uses the basic budget equation:

Where:

• \( \text{Income} \) — Total monthly income (GBP)
• \( \text{Expenses} \) — Total monthly expenses (GBP)

Explanation: A positive result indicates money left after expenses (surplus), while a negative result shows a deficit.

3. Importance of Budget Calculation

Details: Regular budget tracking helps identify spending patterns, plan for future expenses, and ensure financial stability. It's the first step toward effective money management.

4. Using the Calculator

Tips: Enter your total monthly income and expenses in GBP. Include all sources of income and all regular expenses for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What counts as income?
A: Include all regular income sources - salaries, benefits, pensions, rental income, and any other consistent earnings.

Q2: What should be included in expenses?
A: All regular monthly outgoings - rent/mortgage, bills, food, transport, subscriptions, and discretionary spending.

Q3: How often should I calculate my budget?
A: Monthly calculation is recommended, ideally after all bills are paid but before the next pay period begins.

Q4: What if my result is negative?
A: A negative surplus indicates you're spending more than you earn. Review expenses to identify areas for reduction.

Q5: Should I include savings as an expense?
A: Yes, treating savings as a fixed monthly expense helps ensure you consistently set money aside.