Decide your budget format
An app or online budgeting tool can be a great resource, but a spreadsheet or a notebook and pen can work too. Whatever you choose, make sure it’s something you can keep track of and update.
Note your income and expenses
Take a look at how much money you have coming in on a regular basis, like your salary. If your income changes from month to month, work out the average over the last 3 months.
Then, looking at your bank statements or transaction history for the last 3 months, work out your average monthly spend. By comparing your income and expenses, you'll see if you're living beyond your means or have money left over.
It can be helpful to put your expenses into categories so you can see specific areas where you may be overspending. Include regular outgoings like:
- bills (eg utilities, phone, internet)
- rent or mortgage
- eating out
You might want to use Balance After Bills. It’s a feature in our mobile banking app that shows you how much you could have left for the month ahead, once scheduled bills (standing orders and Direct Debits) are taken into account.
Make a plan
If you feel you're spending too much or want to save more each month, look at what you can change. You could use tools like our budget planner to help you see how you spend your money. By adding in a bit about yourself and your finances, it’ll show you a breakdown of your outgoings, including any money you may have left over.
You could then try making small adjustments to your spending, like cutting out the odd takeaway or trimming your weekly food shop.
You might also be able to save money on your energy bill each month by making your home more energy efficient or switching energy provider.
Explore more: Everyday spending hacks
Once you've decided where to make changes, set yourself a monthly (or weekly) goal for spending in each category.
This might include some trade-offs along the way. If you’ve got £50 for new clothes, it might mean choosing between a pair of trainers or a jumper. The other one will have to wait until next month.
Account for irregular costs too, such as car tax, holidays and Christmas. Allocating a certain amount for unexpected costs at the start of your budgeting period, or saving a little extra to go towards these costs, can be useful.
If you have money allocated for savings, move it into a savings pot or account as soon as you get paid. This can reduce your temptation to spend it elsewhere.
It’s good to aim high, but be realistic: making things too hard may mean you get quickly disheartened.
Stick to the plan
Review your budget regularly to check you’re sticking to the plan.
Pay close attention to how you’re tracking against each category. This will tell you where you may want to cut back or adjust your budget.
If you need advice on your finances, arrange an individual review with us to see how we can help.
If you need some help with your finances, arrange a financial health check with us to see how we can help.