Verified budget, and why I need one?

When we are in a financial crisis and losing sleep because we can’t pay our bills or feed the family, verified budget worksheets can help to negotiate our way back to solid ground, full tummies, and restful nights. 

Financial mentors will work with you to find your true financial position. 

Understanding your financial situation enables you to plan for expenses, repay debts, save, and set goals. This knowledge helps us make informed choices to build a better future. 

A financial mentor uses budget worksheets among other tools. These tools assist in gathering all the necessary financial information to show your financial position. 

Depending on the requirement for the worksheets, these can include; 

1. a budget sheet to provide an overview of your annual income and expenses. 

2. a debt schedule that shows liabilities (what you owe). 

3. a support letter when applying for financial hardship and/or negotiating with creditors. A letter is used to outline any assets that may not show up in the worksheets and may also include;

   • any relevant non-financial impacts that have led to the financial crisis. 

   • outline any actions that have been taken to mitigate the crisis. 

   • a proposed plan to resolve any debt in question. 

Personal budget worksheets record key information about your current financial situation, including income, expenses, and the affordability of any debt repayments.

What does verified mean?

To verify is to check for accuracy, confirm, evidence, prove, ratify, substantiate, show to be true, or validate.

Verify means to make sure or demonstrate that (something) is true and accurate.

Verifying budget worksheets involves evidencing all regular income and expenditure against transactional statements such as bank statements, income statements, and creditors statements.

Why should we verify budgets?

The main purpose of verification is to be certain of accuracy. 

Accurate information is important as it forms the basis of plans and payment agreements. 

At first, a financial mentor will verify your budget to make sure you understand the figures are correct, as it's your budget and you're the one who needs to decide on actions based on this information.

An accurate budget will show exactly; 

• how much you can afford to put aside for annual expenses like vehicle maintenance, insurance, clothing, birthdays/Christmas, etc. 

• how much you can afford to put aside for emergency savings to protect against unexpected expenses. 

• how much you can afford to save for goals, holidays, etc. 

• how much you can afford to go towards any debt repayments.  

If necessary, the budget can serve as the foundation for negotiations with creditors.

During a negotiation, confirmed budgets provide creditors with confidence that payments can be maintained until the debt is completely settled.  

Budget worksheets submitted to creditors are labeled as either ‘verified’ or ‘not verified’. 

If full verification cannot be achieved, any unverified or estimated items should be specifically identified. These items may be clarified in a cover letter. 

How do we verify a budget?

Typically, financial mentors review bank statements to check the accuracy of the figures in the budget. 

Ideally, reviewing bank statements from the past 3 months provides a full picture. However, some payments occur quarterly or annually, meaning they might not appear within this timeframe. In such cases, alternative methods are used. 

• Checking fixed payments like rent, power, and loan repayments, etc, is easy when these are paid through bank accounts and can be shown on a regular monthly bank statement. 

• Costs like food and fuel can vary from week to week, but are predictable and can be averaged out over a few weeks. 

• Irregular expenses can often be identified by reviewing bank statements to gauge levels.

• Shopping with cash is popular, but not always verifiable. In this case, the amount is marked ‘not verified’ and explained in a cover letter. 

Bank statements will also reveal what payments are being missed, such as skipped regular payments or insufficient spending on groceries or food, providing insight into the extent of the case's hardship. 

If the numbers don't match, the financial mentor will spend additional time identifying the error or missing details before finalising the budget.

Ensuring maximum accuracy is in the client's best interest, and this is what the financial mentor strives for. 

Having your budget verified by a financial mentor ensures accuracy and provides a foundation for building a solid financial plan, whether for personal budgeting, hardship assistance, or negotiating a payment plan.

​At Moni Ora, we help you plan your money to reach your goals.

Whether you're in crisis, need help managing debt, or want to plan a better future, our Financial Mentors are local and here to support you.

Our service is always confidential and free of charge.

Book your free, confidential appointment now: call 0800 115 370

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