Starting a budget can feel overwhelming, especially if money has felt tight or unpredictable for a while. Many people feel anxious about looking closely at their finances, and that’s completely normal. A budget doesn’t need to be perfect – it’s simply a way to help you feel a bit more confident and in control. Taking small steps, at your own pace, really does make a difference.
This guide is designed to help you get started gently, without pressure. You can also find a helpful step-by-step planner on MoneySavingExpert: Budget Planner – how to manage your money.
1. What Income Should I Use When Building a Budget?
Begin by writing down all the money that comes into your household each month. This might include wages, benefits, pensions, or any other regular payments. At this stage, there’s no need to analyse anything – this step is just about understanding what comes in. Using the amount that actually arrives in your bank account gives you the clearest picture.
If your income changes from month to month, try using an average or the lowest amount you usually receive, so your budget feels safer and more realistic.
2. What Expenses Should I Include in My Budget?
Your essential costs are the things you need to pay to keep life running, such as rent or mortgage, council tax, utilities, food, transport, childcare, and debt repayments. This part can feel emotional, so it’s okay to break it down.
You might find it easier to start with fixed bills first, such as:
- Rent or mortgage
- Council tax
- Gas, electricity and water
- Internet and phone
- TV licence
- Insurance
- Loan, credit card or other repayments
You can come back to variable costs later. Doing a little at a time helps reduce pressure.
3. How Do I Track Spending Without Feeling Guilty?
For costs that change, like food, travel or social spending, tracking can feel uncomfortable at first. Try to remind yourself that you’re not judging your choices – you’re just gathering information.
You could track spending for a few days a week using a notebook, a budgeting app, or your online banking. Many UK bank apps now categorise spending automatically, which can make this step easier.
4. How Do I Inculde everything?
Not all expenses happen every month. Birthdays, Christmas, school costs, social events and days out are all part of life, so it’s important to include them in your budget.
You could work out a monthly amount for these extras. If some months are quieter, saving a little during those times can help cover busier or more expensive months later.
5. What Next?
Once you’ve listed your income and spending, add it all together.
- Total your monthly income
- Total your monthly spending
- Subtract your spending from your income
This will show you whether you have money left over, break even, or are spending more than you receive. Whatever the result, try not to judge yourself – this step is about clarity, not criticism.
Next, look at where your money is going:
- How much do you spend on essentials?
- How much goes on food, travel, or other day-to-day costs?
- Are there any areas that feel higher than you expected?
Seeing this clearly helps you decide what, if anything, you might want to change.
6. How can I set a budget that’s realistic for real life?
Budgets work best when they support you rather than restrict you. Start by setting simple limits for a few categories and remember that you can change them later.
For example, if you usually buy lunch at work or have several takeaways a week, cutting them out completely may not be realistic. Instead, set a monthly amount for lunches or takeaways. You might reduce buying lunch to a couple of days a week and take food from home on other days, or limit takeaways to once a week and keep easy meals in the freezer.
Change takes time, and there will be weeks when things don’t go to plan – that’s okay. The goal is progress, not perfection.
7. How much should I save when money is tight?
Saving even a small amount can help you feel more secure and reduce the need to borrow in the future. Putting aside £1 or £2 a week is a positive step.
At Eastern Savings & Loans Credit Union, members can save small, regular amounts, and many people find this builds financial resilience over time. You can also explore other savings support and guidance on the ESLCU website.
Some people find it helpful to open a separate savings pot for emergencies, even if it grows slowly.
8. How often should I review my budget?
Your first budget won’t be perfect – and it doesn’t need to be. Try reviewing it once a month, especially in the early stages. Reviewing helps you spot where money is tighter than expected, adjust categories, and notice where you’ve done well.
If you have money left over, you might choose to:
- Add a little more to savings
- Build an emergency fund
- Pay extra off debts where possible
If money is still tight, your next steps might include:
- Looking for support with benefits or debt advice
- Adjusting spending limits gently
- Using a spending diary for a short time to spot patterns
Improving financial resilience is about small, steady changes that support your wellbeing over time.
9. What If My Money Doesn’t Last?
If you’re still finding it hard to make money last until payday, a spending diary can be very effective.
For a week, or ideally a month, write down everything you spend – card payments, cash, direct debits and online purchases. Instead of just writing “£85 food shop”, break it down into items such as meals, cleaning products or toiletries. Seeing how individual purchases add up can make patterns clearer and help you decide what to change.
Final thoughts
Budgeting isn’t about stopping yourself from enjoying life. It’s about making sure your money works for you and supports what matters most to you. With small steps, realistic plans and regular reviews, you can build a budget that brings more peace of mind and helps you feel more in control of your finances.