Understanding your housekeeping budget is critical before starting a Debt Management Plan. It is a significant part of your total living expenses.
Included in this article:
- What is your housekeeping budget?
- Housekeeping budget guidelines for a DMP
- What if you spend more than the recommended amounts?
- Can you include a budget for children over 18?
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What is your Housekeeping Budget?
Your housekeeping budget is the amount that you spend on food and other household essentials such as toiletries and cleaning products. It is not normally a fixed each month and so can be difficult to quantify.
You may do a big supermarket shop once every two weeks. But then you buy things like milk and bread more often. Alternatively you may do a food shop every day. In additional there are things such as food at work.
When working out your budget you need to add together all these expenses. If you miss anything or the figures are wrong you will be short if you start a Debt Management Plan (DMP).
Your housekeeping budget must be sufficient for your needs but must also fit within acceptable perimeters. If it is too high or too low your creditors might reject your DMP payments.
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Housekeeping Budget guidelines for a Debt Management Plan
Most lenders use a set of living expenditure guidelines. They include an amount which they believe is reasonable for an average family to spend on monthly housekeeping.
The amounts allowed depend on the number of people in your household. They may differ slightly from company to company but are generally accepted as follows:
- Single person: c£220 per month.
- Couple: c£350 per month.
- Budget for each additional child: £90 per month.
In addition to these you are allowed to add some extra food budgets. These include meals at work of £40 per adult and school meals.
Since this article was written these figures may have changed. Up to date information about all of the acceptable living expenses allowances can be found in our living expenses guide.
What if you spend more that the recommended amounts?
The housekeeping budget allowances may seem very low. However you have to remember that they are only relevant because you want to start a Debt Management Plan.
You cannot afford to repay your debts. You therefore want your creditors to accept reduced payments. They will only do that if you are prepared to meet them half way. You must tighten your belt where you can.
However your housekeeping budget must not be lower that the amount you believe you can live on. If it is too low you will spend more anyway. As a result your Plan payments will be unaffordable and it will fail.
If you need to spend more than the guidelines you should include higher amounts in your budget. However you must be able to justify these. Perhaps you or your children have special dietary requirements.
Can you include a budget for Children over 18?
You may have children living with you who are over 18. If they are still classed as dependent they can be included in your housekeeping budget. This is the case if they are in higher education or need special care.
If they are over 18 and not dependent you can only include them if they are contributing to your income. If they are working and paying you rent or board there is no problem with this.
However if they are not working including them in your budget could be an issue. Your creditors will feel the children are a drain on your income. They will be seen as part of the reason you cannot pay your debts. In these circumstances your Plan is less likely to be accepted.
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2 thoughts on “Reasonable Housekeeping Budget for Debt Management – 2023 Guide”
I’m off work due to severe arthritis in 3 joints,both knees and right hip,plus a back problem so mobility is a problem.
I spent a lot on public transport,plus mini cabs to go to appointments,doing laundry,going to friends,shopping as I can’t walk any real distance which has been recorded in medical assessments and my GP. Is there a ceiling figure on transport costs?
Also I have to buy a lot of fresh ready meals or takeaway delivered as im unable to cook when having flare ups which costs considerably more. There are things I need like a new mattress,for medical reasons,my back.
What I’m asking Is is there more leverage in budgets to allow for people who have medical problems as I do?
I have been off work nearly 20 months now due to the going problems I am almost like a prisoner at home,having the extra funds will allow me to get out more.
If you have legitimate reasons why your costs in specific areas exceed the recommended amounts then yes you should include the figures you need. In your case where you have specific transport and housekeeping costs due to your medical condition it is acceptable to include these as they can be justified. I have little doubt they would be acceptable to your creditors.
From what you have said I am not sure if you are currently in a debt management plan or thinking about starting one? Given you are not working and have a limited income I am wondering if a DMP is the right solution for you. Are you a home owner? If not I would suggest that perhaps considering the option of bankruptcy or DRO might be better for you.