Making a budget

We all know making a budget is A Wise Thing To Do. It's also pretty boring. Here's The Mix’s ultra-quick guide to budgeting, so you can go back to having fun (without spending money you don't have).

picture of stack of coins

The price of all those coffees can start stacking up

Step one: How much money do you have?

By which we mean, how much money comes into your account each month?

Find out by whacking open your payslip or checking your bank account online on payday. Or, if you’re a student, work out how much student loan you get and when. Write this number big at the top – add glitter-glue and stickers if you really want.

Step two: How much money ABSOLUTELY HAS TO leave your account each month?

Deduct from your sparkly grand-total, the money that you have to spend. Usually on those boring-but-essential things like shelter and food. Outgoings most of us have are:

  • Rent
  • Bills, including mobile, internet and TV licence
  • Council tax
  • Food – work out how much you roughly spend a week and then multiply it by four
  • Travel to work/college
  • Student loan/credit card repayments

Step three: Plan for unexpected costs

When you’re budgeting, it’s always worth planning in an extra 10% to your essential outgoings as life loves kicking you in the ass financially. For instance, what if your car breaks down? Or it’s your mate’s birthday? Or some technical glitch means your bank doesn’t transfer your pay cheque to your account? It’s extremely important to have this 10% cushion – otherwise you risk being suddenly catapulted into a world of debt you haven’t planned.

Step four: Work out what you have left

This figure is your monthly budget – your ‘disposable income’.

It’s this leftover money you need to keep a beady eye on, as this is where you’re likely to overestimate how much you have. £70 a week might seem a lot to start with, but once you’ve bought a round after work on Tuesday and a magazine and coffee on Wednesday, you’re already down to £55 and it’s not even the weekend yet.

Sometimes it helps you get a sense of how much you have by feeling the actual cash in your hand – one tip is to take out your weekly budget at the start of the week. You’ll then soon get used to how much money you really have. Best not wander about with all of it on you though, in case you get mugged or lose it.

I hate maths. Can I get someone to sort a budget out for me?

Yes. There are lots of online tools that help you break down your spending. Here are some we’d recommend:

Students can pop in details of their income and UCAS will generate a handy budget for them with this calculator.

This more intense budget planner takes around 20 minutes and will really help you get a hold on your ingoings and outgoings.

If you need further support on this, give us a call on 0808 808 4994. We’re unable to give specific money advice but can guide you to the best places for expert support.

Next Steps

  • Use the Money Advice Service's budget planner to take charge of your finances.
  • Chat about this subject on our Discussion Boards.
  • Need help but confused where to go locally? Download our StepFinder iPhone app to find local support services quickly.


budget| saving


Updated on 29-Sep-2015