You can create a budget using a budgeting app, a spreadsheet, pen and paper, whatever works for you – we have some recommendations below. Once you know how much you’re currently spending on each category per month, your next step is to think about how much you want to put in each category, and create a system for recording those intentions and comparing them to your spending in real time. Remember to account for infrequent large expenses as well, e.g. This should also help ensure you haven’t missed out any categories of spending from your list. The fastest way to do this is to go through several months of transactions, and assign every transaction into one category or another. Next, you need to work out how much you actually spend on each item in your list. If you need some help coming up with categories to consider, see our Living Costs page. It can be useful to convert the annual costs into a monthly bill for budgeting purposes. annual MOT or insurance payments, Christmas presents, holidays). Discretionary expenditure – spending on “wants”, which you could choose to reduce (e.g.rent/mortgage, utilities, debt payments, food, petrol) Fixed expenditure – spending on “needs”, which you can’t choose to avoid (e.g.The first step to creating a budget is to learn about your current spending. Get comfortable with reasonable spending ✅.How are my investments protected? (FSCS).
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