How to budget in 2018


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Work out what you're spending and how you can save money with our tips.


Personal finance can be tricky. Many of us aren’t taught how to budget properly. While you may not have a degree in financial planning, you can definitely get your spending under control with our guide!

Before you can even begin to budget properly, you need to determine where your money is going. While there are online tools you can use to help you track, you can also put together a spreadsheet yourself.

Go through your last few bank statements and determine the following:

  • How much you spend on monthly bills (rent/mortgage, phone, water, energy, council tax, internet, etc.)
  • Your average travel costs (bus passes, train tickets, taxi fares, fuel, etc.)
  • Living costs (food, clothing, toiletries etc.)
  • How much you spend on leisure (holidays, days out, meals out, etc.)
  • Your average monthly spend on friends and family (gifts, etc.)
  • Any other financial costs you may have (insurance, car finance, loan repayment, etc.)

Once you’ve done this, you should be able to see some key areas where you can cut back. When it comes to figuring out how much you should be spending in each category, there are loads of websites and apps that can help you budget. Financial management apps can be useful tools, but it’s important you ensure they’re adequately protecting your data.

The 50/20/30 rule

If you’re a bit wary of using a budget app, you can always follow some more traditional methods of budgeting. A good rule to follow when it comes to budgeting is the 50/20/30 rule. The 50/20/30 rule stipulates that 50% of your income goes to essentials, 20% goes to savings and 30% is dedicated to personal expenses.

Under the 50/20/30 rule, essentials covers anything you absolutely have to spend, including housing, food, transportation and utility bills. You should then put 20% into some kind of savings account, leaving you with 30% of your take-home pay to use for personal items. 

Should you decide to follow the 50/20/30 rule or any other budget, a great (and free!) way to keep track of your spending is by using budget spreadsheets. There are loads of free spreadsheet templates available online for download or you can always make your own.

How to save money

To further help you with your budgeting, we’ve put together some tips to help you reduce your spending. Follow our simple ways to reduce spending to make sticking to your budget easier!

1. Take lunch to work: Bringing lunch to work every day can save you over £1000 a year.

2. Batch cook: Batch cooking is a great way to help you save money. Not only is bulk cooking more cost effective in itself but having food ready to go in the fridge means you’ll be eating out less frequently.

3. Don’t buy coffee every day: Bringing your own coffee in a reusable travel mug is both good for your wallet and the environment.

4. Shop around: From gas and electricity to internet and television, switching service providers can save you loads of money monthly.

5. Look for deals: Sites like Groupon and LivingSocial are great ways to save money. Getting memberships with companies like Tastecard can help you save money on dining out throughout the week.

6. Use cashback websites: Cashback websites are a great way to help you save money when you spend.

7. Pay in cash: Take a set amount of money out of the bank every week and stick to only spending that amount. People tend to spend less when they’re paying for everything in cash.

8. Save on monthly subscriptions: Opt for home workouts instead of a costly gym membership. There are loads of great workout videos available for free on YouTube – try FitnessBlender or POPSUGAR FitnessRe-evaluate what else you’re paying for monthly and remove anything you’re no longer using.

9. Offset expensive purchases: If you know you’ve got a big spend coming up, try to offset some of the costs by bringing in some additional funds. You could try selling on Facebook or Gumtree, for example.

10. Buy used: Not only is this good for your wallet, but it also helps the environment. You can also check out websites like Freecyle to find items available for free in your area.

Most importantly, plan ahead! The biggest part of budgeting is planning. Whether you use budgeting spreadsheets or apps, make sure you plan ahead. There is no greater way to guarantee success on your budget than knowing exactly where your money is going in the upcoming weeks.

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