A great way to get started with your personal budget is by using the Budget calculator provided by the Money Advice Service. It’s completely free and makes the process easier by taking you through in a logical order which includes every detail. It even lets you pause and save it so you can do it in bite size chunks.

Why have a household budget?

You know that all your essentials are taken care of
You are minimising the risk of any nasty shocks, like an unexpected bill
A good credit rating will be easier to get and maintain – meaning that you are more attractive to a lender, if you ever need a mortgage or a loan
By consciously planning what you are doing with your money, you are less likely to get into debt
Budgeting enables you to actually build the elusive savings pot

It’s often the case that lots of little changes can add up to make one significant saving. We can help you uncover what can be done so you can take action.

Soon you will be able to see what and when you can afford…well, whatever your next goal is. Wedding, new car, holiday, getting rid of that debt, buying a house…having a realistic household budget includes saving, it’s up to you what you spend it on.

Budget saving example

The average price of a medium takeaway coffee is £2.50.
Get one every morning on the way to work and that’s £2.50 x 5 = £12.50 per week.
That’s £50.00 per month.
So you could still treat yourself once a week, only spend £10 and save £40 every month.
(Or buy a travel cup and bring it with you for no extra money.)

What you need

Basically, you need to know how much comes into the house, how much goes out and exactly where it goes. The last point is often the hardest to pin down.

Gather all your information together: payslip, bank statement, bills (energy, phone, insurance etc.), food and clothing, travel, leisure (Netflix, eating out, holidays). Work out how much you spend on each area every month.

Top tip
Yes, it’s a lot of maths. Many people are daunted by the very idea of dealing with numbers and this puts them off making the most of the money they work hard to earn. If this is you, give yourself a break and don’t try to tackle the whole thing at once. For example, work out one section each evening after work. It’s better to do it slowly and accurately, than not at all.

It doesn’t matter if you use a pen and paper, spreadsheet or app to work all this out. Whatever you are most comfortable with will do the job.

What am I looking for?

Firstly
Your first aim should be to make sure that you are not spending more than you are earning. If you are, you need to delve deeper into your spending and see where you can be more efficient. Even small changes make a big difference when there are a lot of them and you maintain them over time.

Secondly
Your second aim is to make sure you cover as many areas as you can. Dip into our range of guides and calculators for a helping hand.

For example: Make a date in your diary for when your insurance policies will be up for renewal. Find out how long you have before the current company starts an automatic renewal. Then make a date with yourself to shop around for a new policy, in plenty of time, and get yourself the best deal you can. And of course, there’s the much publicised energy switching comparisons to be taken advantage of.

Top tip
A budget is not a concrete life plan; life changes, prices fluctuate, boilers break. Review your budget regularly to take all these elements into consideration. It’s also a great time to give yourself a pat on the back for being marvellous with your money.