Before anyone embarks on a finance decision or any decisions that will impact your finances they should produce a statement of affairs.

This is basically a budget of your current financial position, so you calculate your income, your outgoings, your assets and your debts.  Its a bit like producing a set of accounts for a business, except your producing them for yourself.

By doing this you can work out what debt you owe, what % its on and therefore which is the most expensive debt you have.  Remember that although I am looking to pay of my mortgage if you have other debts it might be best to pay those off first as there probably more expensive than your mortgage.

Once you have a statement of affairs you can then work out a budget, because you’ll know how much is needed for living expenses ie running your house, car, feeding your family.  You will also know how much is needed for debt repayments ie the standard repayment.  The last piece you have left is your disposable income, this is money that can be either spent as you want of directed at overpaying your debts.  You can also use your statement of affairs to identify ways of cutting back on costs, such sky tv or mobile phones.

From producing a budget on my finances I know I can make a minimum overpayment of £636 per month.   This excludes making savings for pensions, holidays, and any one of items that happen during the year ie car insurance.

I will try to either find some good online budgeting tools or add one to this site for downloads.

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