Muhammad Siraj's Blog

Working out your budget for a Scottish Trust Deed

One of the key things needed to make Scottish Trust Deeds work well is a realistic and workable monthly financial budget. Your Insolvency Practitioner will ask you to make a list of your income and outgoing expenses in the form of a budget, which he will send to your creditors as proof of the amount of disposable income you will have to pay them.
Getting the figures down on a paper budget for a Scottish Trust Deed is one thing. However being able to stick to the budget is quite another! The initial budget you work out for your Scottish Trust Deed is a balancing act. On the one hand you may be tempted in the beginning to offer as much money as possible to your creditors, but you must remember that your Scottish Trust Deed will run for around 36 months. Could you live on a self-imposed highly-restrictive budget for three years? Or will you start to feel deprived after a few months?
Here are some tips to help you put together your Scottish Trust Deed budget so that you can live happily within it:
1) Write down every source of income you have, including tax credits and child benefit.
2) Next work out how much you spend every month on living expenses. Start with essential spending on housing (mortgage/rent), council tax, insurance, food and utilities. Don’t be tempted to skimp on essential food and heating and impose poverty conditions on yourself. Scottish Trust Deeds do not require you to live like a pauper. Likewise don’t cut out building and/or contents insurance in case the worst happens. Protect what you have.
3) Add in job-related expenses, such as public transport costs and car expenses (petrol and insurance). These are important to ensure the continued stability of your income to pay your Scottish Trust Deed.
4) Now add in something for health, beauty, clothing and entertainment. You would not be allowed to spend a fortune on these (for example multiple salon treatments or an expensive haircut and colour may be out), but a basic haircut every now and then, plus dental and medical expenses should be fine within a Scottish [url=]Trust Deed budget[/url]. And don’t believe you can get away without spending on clothes! Sooner or later you will need new items of clothing to ensure you continue to look professional at work, but again be realistic about the costs. Prada and Dior suits will be outside of the budget for your Scottish Trust Deed.
5) Finally, work out the monthly costs of irregular or annual expenses like vehicle MOTs, servicing and tax, TV licence, equipment servicing (for example your boiler or other gas appliances), subscriptions, birthdays and Christmas. Then factor these in.
Now add up all your expenses and subtract them from your income. Is there a surplus? You need around £150-£200 every month for a Scottish Trust Deed to stand a chance of being accepted by your creditors. If you haven’t, you have to go back and re-work your figures. Areas in a budget that could be reduced without too much pain include switching to cheaper mobile phone tariff or PAYG, and lowering cable subscriptions to a cheaper package. Also switching your utilities or insurance to cheaper providers could free up a little more income for your Scottish Trust Deed budget. There are many excellent websites with suggestions on how to reduce your household expenses relatively quickly and painlessly.

At the beginning, it will feel awkward to stick to your budget. You may see something you want in a shop and instinctively reach for your debit or credit card only to find them gone. Before your Scottish Trust Deed you were used to using credit cards to supplement your income and these will not be available for you to use any more. Now you must plan ahead and use cash wherever possible. It will take discipline to stick to your budget and put aside money for future expenses, but at the end of the Scottish Trust Deed term your financial muscles will be incredibly strong.

Finally, because of the inevitable cost of living rises and salary fluctuations over the term of your Scottish Trust Deed, your Insolvency Practitioner may request your financial information every six months to make sure you can still afford the payments. If you find you have been having problems with your budget, this is your opportunity to ask for their advice and rework it a little.

You can’t live a champagne lifestyle on a lemonade budget, but by adjusting your lifestyle and incorporating the power of [url=]Scottish Trust[b] Deeds [/b][/url]you can enjoy something far better than champagne – freedom from worry about your debts and the prospect of a completely fresh [b]debt free[/b] start in three years time.

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