Money: Video playlist

Calculating bills

A bill tells you how much money you owe when buying goods or using a service.

There are different types of bills.

Essential costs like rent or mortgages.

Service bills like phone payments, subscriptions and insurance, and everyday expenses like food and transport.

To decide what to pay first, you need to balance needs versus wants.

Needs are essential for day-to-day living.

Things like shelter, gas and electricity, food and transport to school or work.

Wants are things we would like to have, but we could live without, like music or streaming subscriptions, games or snacks.

Budgeting helps make sure your income can pay for the things you need and some of the things you want.

Leo’s net pay is £1,500.

His essential bills are…

Rent, £600.

Utility bills, £150.

Council tax, £100.

Home insurance, £50.

He spends £100 on train travel and between £150 and £200 a month on food.

That leaves between £300 and £350 for other costs.

Any money left can go towards his wants, like streaming, music or a gym membership.

He might also want to put some money aside for savings.

If your bills add up to more than your income, cut back on spending.

Prioritise your needs and decide which wants you can live without, to make savings.