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Making a budget

How to make a budget

A budget is a list of all the money you have coming in and going out in a month.

A budget can help you:

  1. See where your money is going
  2. Make plans
  3. Spot places to save
  4. Get back on track

Budgets should use monthly figures because most important bills are monthly.


Look at the money you've got coming in

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Add together all your monthly income including:

  • Wages
  • Benefits
  • Pensions
  • Housekeeping money
  • Child Maintenance payments

Understand your spending

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Make a list of all your monthly costs. Include:

  • Rent/Mortgage
  • Household bills
  • Insurance
  • Subscriptions
  • Medicines
  • Childcare
  • Food
  • Travel

You should also include one off payments like:

  • Christmas
  • Holidays
  • Repairs
  • Vet’s bills

How much is left?

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This will help you know if there is anything extra.

  1. Add all your income together
  2. Add all your spending together
  3. Subtract your total spending from your total income
  4. Any extra money is called a ‘budget surplus'
  5. A ‘budget deficit’ is if you have more going out than coming in

Budgeting FAQs

How do I get monthly figures?

Not all income and spending is monthly.

Here is how to calculate monthly figures:

One off payments

Things like Christmas, a holiday, or an emergency:

  • Divide the yearly or one-time cost by 12

Weekly or 4-weekly payments

  • Multiply the weekly figure by 52 (the weeks in a year)
  • Divide this by 12 (the months in a year)
  • The result is your calendar monthly figure

Annual Salary

  • Take the yearly total for your salary
  • Divide by 12 (the months in the year)

Council Tax

Usually billed across 10 months of the year.

  • Multiply the monthly payment by 10
  • Divide by 12

Our tips on income and expenditure statements can help.

How can I save money on a budget?

When you look at how much money is coming in and going out, you may spot areas where you could save.

Here are our most popular money saving guides:

How do you create a budget to pay off debt?

Follow the tips above or use our free budgeting template to add your:

  • Income: Wages, benefits, pensions
  • Household spending: Food, bills
  • Debts: What you owe, monthly payments, interest and charges

Find out more about your debts and check who you owe money to.

I need help building my budget - what can I do?

Our online advice tool can help you through each stage of building a budget.

You can also get in touch with us by phone and go through your budget with one of our friendly advisors.

dad and daughter cooking

Need help making a budget?

We can work out your budget for you.

Get help online now