Breez Forms


Why Prepare a Budget?

Having a budget that details your income and expenditure will help you to maintain control of your finances and, if necessary, help to illustrate the problems you may be having with your creditors.   Your budget will succinctly outline what your regular income and expenses are, and helps ensure that don’t overlook any expenses. 

Next step – a Debt Management Plan

Preparing a simple debt management plan using figures from your budget provides you a better idea of whether you are able to handle your debt situation.

Your budget assists you in preparing a debt management plan. A debt management plan helps to work out how much money is left after you pay your highest priority debts each fortnight or month. You will then be in a position to determine how to allocate the money and make affordable payments off your lower-priority debts.

Step 1:  Take your total household income and total living costs (as determined from your budget).  Keep an emergency fund to meet unplanned expenses such as medical bills or emergency car repairs. 

Step 2:  Prepare a list of all the people and parties you owe money to and how much the minimum monthly repayments are (in accordance with your contract/debt agreement).

Step 3:  Summarise these and slot them into the following format: 


Monthly Repayment

Total income $3,000
Subtract Living Costs $2,000
Subtract Emergency fund $400
This leaves you funds to pay debt $600

With the available funds you have for debt repayment, make a decision about how you will allocate the available funds to make repayments against these debts.  You may decide to:

  • Pay each creditor a percentage of the normal payment due
  • Split the available funds evenly between all creditors
  • Pay more off the higher interest debts
  • Request that certain creditors postpone debts for short periods 

Step 4:  Make a written payment plan with your creditors and keep to this plan. 

Step 5:  Communicate any further problems to your creditors immediately they become known to you.