Budgeting doesn’t have to be boring, restrictive, or full of spreadsheets you’ll never open again. In fact, creating a realistic budget that works is one of the most empowering things you can do for your money — especially if you’re living in the UK where costs are rising across the board.
In this guide, I’ll walk you through how to create a simple, honest budget, without feeling overwhelmed or giving up your favourite coffee. Whether you’re starting from scratch or fine-tuning what you already have, these steps will help you stay in control of your money and actually make progress.
Step 1: Know Your Numbers
Start by gathering your monthly income (after tax) and your essential expenses, such as:
- Rent or mortgage
- Council tax
- Utilities
- Groceries
- Transport
- Minimum debt payments
Be honest with yourself. Don’t guess — check your bank statements, bills, and receipts.
Step 2: Track Your Spending
For the next 30 days, track every pound you spend. You can do this with a notebook, a spreadsheet, or a budgeting app like Emma or Snoop.
This will help you spot patterns, overspending habits, and areas where you can cut back.
Step 3: Use a Simple Budgeting Method
Choose a budgeting method that suits your lifestyle. The most popular in the UK include:
- 50/30/20 Rule – 50% needs, 30% wants, 20% savings/debt
- Zero-Based Budgeting – Every pound is assigned a purpose
- Envelope Method – Physical or digital categories for spending
Pick one that fits your financial goals and level of discipline.
Step 4: Include “Unexpected” Expenses
Budgets often fail because we forget about non-monthly costs like:
- Birthdays and holidays
- Car MOT or repairs
- School uniforms or supplies
Set up sinking funds for these. (We’ll cover sinking funds in a future post.)
Step 5: Adjust and Review Monthly
Your first budget won’t be perfect — and that’s okay. It’s a living tool. Review it monthly and make adjustments as needed. That might mean reducing your takeaway budget or tweaking your grocery spending.
Step 6: Use Tools to Make It Stick
You don’t have to do this alone. Use tools like:
- Budgeting apps (many are free)
- Printable templates
- Spreadsheets
- Visual trackers for savings goals
Coming soon: Download our free monthly budget planner printable (sign up for our newsletter!)
Final Thoughts
A realistic budget isn’t about restriction — it’s about knowing where your money goes and choosing what matters most. Whether you’re trying to build savings, pay off debt, or just stop feeling broke before payday, a budget can be the game-changer you’ve been waiting for.