Your Financial Picture

Most people have a rough idea of what they earn. Very few know what they actually spend. This course fixes that.

A budget isn't a punishment. It's a map. The goal isn't to spend as little as possible — it's to make sure your money is going where you actually want it to go.

List every source of income

Salary (after tax and NI), freelance income, benefits (Universal Credit, Child Benefit, etc.), rental income, side income. Write the monthly take-home figure for each. If your income varies, use your lowest typical month — not your best one.

List every expense

Split into three columns: Fixed (same every month — rent/mortgage, council tax, subscriptions, phone), Variable (changes but predictable — food, fuel, utilities), Discretionary (could stop tomorrow — eating out, clothes, hobbies).

The gap

Income minus all expenses = your monthly surplus or deficit. If it's positive, that's your building material. If it's negative, you're borrowing from your future self — and this course will help you change that.

The 50/30/20 rule (and when to ignore it)

A common starting framework: 50% on needs (rent, food, bills), 30% on wants, 20% on savings and debt repayment. It's a useful benchmark, not a law. If you're in debt, skew more than 20% toward clearing it. If your rent is 60% of take-home, the 50% target isn't realistic — work with what you have.

Calculate your net worth

Net worth = everything you own (assets) minus everything you owe (liabilities). It's the only number that tells you where you actually are.

Assets

List your assets with current values: cash in bank accounts, value of ISAs and pensions (pension providers will show this), value of property (Zoopla estimate is fine for now), value of investments, car (use Auto Trader part-exchange value — not what you paid for it).

Liabilities

List every debt: mortgage balance, credit card balances (all of them), personal loans, car finance, buy-now-pay-later balances, student loan balance (this is special — see below), money owed to friends or family.

Your debt map

For each debt, note: the balance, the interest rate (APR), the minimum payment, and the type (secured vs unsecured). This becomes your working document for Phase 2.

Net worth is a starting point, not a verdict

A negative net worth — more debts than assets — is normal for people in their 20s and 30s. The number isn't the problem; not knowing the number is. Now you know it, you can change it.

Save this document

Save your budget and net worth calculation somewhere you'll actually open it again. Name it "Financial Picture — [Month Year]". You'll update it monthly. The changes you track over time are the most motivating thing in personal finance.