Budget Planning Guide

On February 16, 2025 By newsroom Topic: Saving And Investing Money

Managing your money starts with creating a realistic and detailed budget. Here's how to use the Budget Planner Tool and tips for gaining control of your finances:


Why Budgeting Matters

  • Do You Spend More Than You Earn?
  • Overspending can erode savings or lead to a debt spiral.
  • Use the budget planner to pinpoint your financial status accurately.

  • What Can You Afford?

  • Understand your spending and identify areas to save or adjust.
  • Prioritize essential expenses while planning for savings or debt repayment.

Six Tips Before Starting Your Budget

  • Gather Your Financial Records:
  • Use bank statements, bills, and receipts (cover at least three months).
  • Track both regular and one-off expenses like gifts or vacations.

  • Decide Who the Budget Is For:

  • Is this for just you, or does it include your partner/familyBudget accordingly.

  • Be Honest with Your Figures:

  • Overestimate expenses to ensure you’re prepared. Avoid double-counting costs.

  • Separate Debt from Spending:

  • Differentiate repaying existing credit card debt from regular spending.

  • Account for Pensions:

  • Include only pensions paid via your bank account (not payroll deductions).

  • Include Irregular Spending:

  • Break annual costs (e.g., holidays, car maintenance) into monthly amounts.

Steps to Use the Budget Planner

  • Download the Budget Planner:
  • Choose the Excel or printable version for detailed tracking.
  • Fill in all your income and expenses honestly.

  • Identify Overspending:

  • If your outgoings exceed your income, take action to cut costs.

  • Adjust and Save:

  • Use the piggybanking technique to allocate funds to specific categories.

Strategies to Reduce Overspending

1. Pain-Free Savings

  • Cut bills without sacrificing lifestyle (e.g., utilities, groceries).
  • Use tools like cashback sites or switch to better deals on broadband, insurance, etc.

2. Rebudget

  • Reassess after cutting costs and revisit the planner.
  • Stick to spending within your means.

3. Painful Savings

  • Reduce non-essentials: consider skipping holidays or dining out.
  • Sell unused items (e.g., old clothes, electronics) to generate extra cash.

How the Piggybanking Technique Works

  • Categorize Spending:
  • Identify main expense areas (e.g., rent, holidays, groceries).

  • Create Spending Pots:

  • Use apps like Monzo, Starling, or Chase to split money into virtual pots.
  • Alternatively, set up separate bank accounts for specific categories.

  • Automate Transfers:

  • Use standing orders to move funds into each pot after payday.
  • Example: Allocate £67/month to a Christmas savings pot for a £800 annual budget.

  • Track Spending:

  • Your main account reflects your discretionary spending. Spend what’s in your pots, not beyond.

What If You’re in Debt?

  • Avoid Debt Spirals:
  • Spending more than you earn leads to unsustainable borrowing.
  • Seek help from agencies like Citizens Advice or StepChange Debt Charity if necessary.

  • Start Small:

  • Reduce unnecessary expenses like daily coffees or subscriptions.

  • Plan for the Future:

  • Prioritize paying off debt before saving for long-term goals.

Tools to Help You Budget

  • Budget Planner Spreadsheet: Downloadable and printable options.
  • Apps: Chase, Monzo, and Starling for easy money management.
  • Guides: Explore the Money Makeover and Stop Spending guides for further tips.

Final Thoughts

Budgeting is a powerful tool for gaining control of your finances. By tracking income and expenses, making adjustments, and using techniques like piggybanking, you can avoid overspending and build a secure financial future.

Ready to startDownload the Budget Planner and take control today!


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