Woman writing a budget

Write a budget

Learn how to put together a budget that works for you, and stay on top of your spending.

It's worth taking the time to make sure you really understand how much you have coming in, what your most important outgoings are (like rent, mortgage, bills, debts) and what else you're spending your money on.

We’ve put together a four-step plan to help you to write a budget.

The first step is getting everything out on the table like bills, bank and credit card statements, and making a note of all the direct debits you have set up so you can see what your finances really look like.

If this is the first time you’ve really looked at your finances and your day-to-day money feels out of control it can feel overwhelming, especially if you have more going out than coming in. Understanding your situation is the first step to taking control.

The next step is to use all of this information to work out what you have coming in and going out, and where that money is being spent.

Don’t just think about your monthly bills. Think ahead and include spending that happens less often, like Christmas, birthday presents, takeaways, clothing, household goods or even holidays.

It's important to be honest about your spending at this stage. If you underestimate your spending now, there may be fewer opportunities to cut costs or save money.

Our interactive budget planner helps you work out how much you're spending on essentials and non-essentials, and will give you a clear picture of how much you're left with at the end of each month.

You may find that you have more money going out than coming in. Don’t despair! You’ll be able to start taking meaningful steps towards getting back control once you know where everything is going. 

You can use our budget planner to play around with cutting different types of spending or adding in savings to see how this impacts your overall budget. It's not easy to increase the amount of money you have coming in each month but you can gain more control over what goes out. 

If you’re putting aside any savings, you could transfer this as soon as you're paid so that it doesn’t become part of your spending by accident. If you need to, you can always dip into your savings and then top it back up again later.

You may not be able to make all your changes at once. Take your time and tackle each area of spending in turn. You may even find that you need to adjust your budget slowly over a period of months.

Writing a budget is not a once-and-done. Keep going back to your budget planner to make sure you're on track.

You could also try setting yourself reminders to check your budget, review your bills (especially if you’re still in a contract and can’t switch yet) and see how you’re doing against your plan.

There may be set backs along the way, but you should be more in control than you were at the beginning. And remember you’re taking lots of positive steps, make time to celebrate your achievements along the way.

Extra tips

If you are on a low income there may also be opportunities to increase it through state benefits you may be entitled to.

If you are expecting or have a family, there are lots of different types of support you may be entitled to from free dental care to the Sure Start Maternity grant.

  • The Government website has links to three online calculators to work out what benefits you may be entitled to.
  • The Citizens Advice website also has lots of useful information and calculators to help work out what benefits you may be entitled to.
  • The MoneyHelper website also has lots of information to help you plus links to free advice helplines if you need help working out entitlements, making a claim or resolving issues.

With tuition fees, rental payments, bills and experiences to be had, being a student can be an expensive time these days. Your children may be leaving the nest but are they ready to budget for themselves?

University is often the first time that your children will need to start thinking seriously about their own finances. Showing them how to budget properly means they will have a better idea of how much they have left to spend on socialising and enjoying this exciting period of life. More importantly, it will get them thinking about the amount of debt they take on; after all, the debt they incur at university is likely to impact their finances for years to come.

Aside from the tuition fees, your child will have to think about how they support themselves throughout their university years. So they’ll need to do a calculation of any money coming in and their outgoings to establish whether or not they might need extra support, or will need to take on part-time work.

You can use the budget calculator from the MoneyHelper to help them think about their income and outgoings over the course of a year and plan for costs that may come up later in the year once the loans have run out.

Useful links

  • Visit the Government website for links to benefit calculators to see what you may be entitled to.
  • Visit Citizens Advice for useful information and calculators.
  • If you need support with your mental health, visit the Mind website.

Key points

  • Write a budget. This sounds obvious, but unless you have a budget then you’ll most likely spend more than you need to.
  • Once you know what you have coming in, what's going out and when – give your budget an MOT to see if you can cut costs, pay off your debts or put aside some savings.
  • Monitor how you're doing regularly and set reminders to review your bills, debts and savings.

Next steps