Learn how to make a budget with our friendly, step-by-step UK guide. From tracking spending to setting goals, take control of your money without the stress. Perfect for beginners!
How to Make a Budget: Your Money, Your Rules
Hello there! If you’re nursing a cup of coffee and quietly stressing about next month’s bills, you’re in good company. Creating a budget doesn’t need to feel like a school maths test or a guilt trip. It’s simply a clear plan that puts your money to work for you, rather than letting it slip away unnoticed. Think of it as giving every pound a specific job. Whether you’re saving for a holiday, tackling debt, or simply want to break the payday-to-payday cycle, this guide is here to help. No complicated jargon, no mandatory spreadsheets (unless you fancy one). Ready to take control? Let’s get started.
Gathering Your Essentials
You don’t need much. Honest.
- Bank app or statements: Last 1 to 3 months.
- Pen and paper: Or your phone notes
- Calculator: Built into your phone.
- Cup of tea: Essential for morale.
- Optional: Free app like Money Dashboard, Emma, or Snoop.
Tip: Start small. Even 10 minutes gets you moving.
Prepare Your Money Snapshot
First, let’s see where your cash actually goes.
- Open your banking app. Look at the last month.
- Jot down regular bills: rent, council tax, phone, Netflix.
- Note weekly spends: groceries, fuel, lunches.
- Add one-offs: that takeaway, new trainers, birthday gift.
Tip: Don’t judge. Just write. This is data, not drama.
Sort Into Three Pots
The magic happens here.
- Needs: Rent, bills, food, travel. Must-haves.
- Wants: Coffee out, streaming, hobbies. Nice-to-haves
- Savings/Debt: Emergency fund, loan repayments, future you.
Tip: Try the 50/30/20 rule. 50% needs, 30% wants, 20% savings. Adjust to fit your life.
Set Your Goals
Make it personal.
- Short-term: £200 emergency fund, clear overdraft.
- Medium: Holiday in 12 months, new phone without debt.
- Long-term: Deposit for a flat, pension boost.
Tip: Write goals where you’ll see them. Fridge door works.
Build Your Budget
Time to assign pounds.
- List income: Salary, benefits, side hustle.
- Subtract Needs first. Be realistic.
- Allocate Wants. Cut if needed.
- Put the rest into Savings/Debt.
- Leave a £20 to £50 “fun buffer”. Life happens.
Tip: Use cash envelopes or app “pots” to separate spending.
Track and Tweak Weekly
Stay in the loop.
- Check in every Sunday. 5 minutes.
- Log spends in your app or notebook.
- Overspent on coffee? Move £10 from eating out.
- Underspent? High five. Add to savings.
Tip: Treat it like brushing teeth. Quick, regular, painless.
Important Considerations
- Safety First: Always cover essentials. Never skip rent or bills.
- Benefits: On Universal Credit? Budget for advance repayments.
- Irregular Income: Average last 6 months. Build a buffer.
- Myths Busted: Budgets aren’t restrictive. They’re freedom.
- Renters: Include service charges, contents insurance.
Mastering how to make a budget is like learning to cook. Messy at first, delicious later. Start tonight. Jot down three spends from today. Tomorrow, add your bills. In a week, you’ll see the pattern. In a month, you’ll feel in control. You’re not “bad with money”. You just needed a plan. Now you’ve got one.
FAQ:
Q: I hate spreadsheets. Help?
A: Use an app. Emma links your accounts and categorises automatically.
Q: What if I overspend?
A: Adjust next week. One slip isn’t failure.
Q: How much should I save?
A: Start with £10 a week. Build to 3 to 6 months’ expenses.
Q: Can couples budget together?
A: Yes. Joint account for bills, personal pots for fun.
