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Setting a bidget Cont...

 

Help Chloe stay in a job

Chloe has been working at a shop for the last two months.

She is working 40 hours a week at the minimum wage of £5.52 per hour. This means she earns £220.80 per week before tax, but £186.18 after tax.

She must pay £12.50 every week in bus fares to get to work.

Lunch from a local shop every day when she is at work is costing her £15.00 per week.

She pays £60 a week for rent and £30 a week on groceries.

She has other bills to pay for council tax (£50 a month), a TV licence (£11.29 a month), and needs money for her gas and electricity (£15 a week).

She’s repaying £15 per week to a catalogue company after she bought some new clothes, including some clothes for her work.

She goes out after work on a Friday and spends £20 on food, drink and a taxi home.

She spends £10 a week on her pay as you go mobile phone.

She’s having problems making ends meet and often has to borrow money from her mum and older sister at the end of a week. She is thinking about giving up her job, although she doesn’t want to do this as she was out of work for a long time before she took it. She needs some help.

Can You:

To do a weekly budget for Chloe and work out if she will be able to pay her bills next week.

What advice they would give Chloe to make his situation better? Is there any other support she might be able to get?

Think off any organisations that might be able to give her some advice?

budget2

Key principles of setting a budget

Use weekly or monthly amounts – don’t mix them up.

To convert weekly payments to monthly, multiply the weekly payment by 52, and then divide the result by 12. Just multiplying by 4 is not accurate enough.

To convert monthly payments to weekly, multiply the monthly payment by 12, then divide the result by 52.

Make sure the amounts are realistic, preferably based on actual spending recorded in previous bills or statements but if these are not available guessing is better than ignoring them.

Start with a rough copy – and do as many as you need to get it right.

Include fines.

Don’t forget travel costs – for visiting family, getting to work, shops or wherever.

Include any loan or catalogue repayments.

Include an amount for emergencies such as equipment breakdowns and other ‘lumpy’ expenditure like Christmas and birthdays.

Accurate figures will of course give an accurate budget but if you’re not sure of a figure then have a guess at it rather than leaving it out.

Keep the budget under constant review. If some part of it isn’t working, try to change it. It is a dynamic tool, changing to new events like getting a job, finishing paying a fine, or taking out a loan.

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