Creating a budget planner

If you want to take control of your finances, the first step is to analyse your incomings and outgoings. This is where a budget planner comes in. Whether you want to increase your savings or pay off debts, using a monthly budget planner can help you to meet your financial goals.

On this page, you’ll find out what budget planning is, why it’s a good idea to use a budget planner, how budgeting helps and ideas for how to budget your money. 

Budgeting helps you plan your finances and map out how you will spend your money. 

When you have a financial plan in place for your money, it’s called a budget. The benefit of creating a budget and planning how you use your money helps you prioritise your spending. People will often have a household budget plan so they can see how much they are spending on bills and living expenses and how much they will have left over for other things.

A budget planner is a tool or document that records all of your income and outgoings so you can easily evaluate your finances. There are many types of budget planners available, from apps and interactive online tools to a simple spreadsheet or even pen and paper.

The best budget planner will help you identify where you spend money unnecessarily and allow you to save more. The money you have saved you can deposit in the savings account to earn interest on your savings. Free and easy to use, our interactive budget planner can help you organise your finances and get a clear view of what you can and can’t afford.

If you haven’t done it before, budget planning might seem like a daunting process, but there’s really not much to it. Budget planning can be as simple as making a list of your income and all your outgoings, including household bills, living expenses, travel, and so on (see our handy budget planner below). Once you know how much of your income you need to spend, you can figure out how much money you have left each month, as well as how much you could save. 

Keeping track of your money with a budget planner can help you plan your longer-term finances, including planning for larger purchases. For example, you could use a budget planner to get out of debt, to save for a mortgage deposit, car, holiday, or to save for retirement. 

Using a good money planner helps you answer two key questions, which are: 

1. Am I spending more than I earn?

If you don’t keep track of your finances, it’s pretty easy to spend more than you earn, and the reality is that you could be creating a difficult financial future for yourself. You know when you’re spending more than you earn when you start to dig into your savings or get into debt. 

Budget planning can help you assess your financial situation and identify ways you could reduce your spending, as it gives you an accurate overview of how much, when and where you’re spending your money. Budget planners are designed to give you an accurate assessment of your finances so you can make better financial decisions for the future. 

2. What can I afford to spend with the budget I have?

Once you know where you’re spending your money, you can then start to prioritise what you should do with your money and where to direct your expenses. This, of course, depends on your own financial priorities and needs. 

Although a budget planner gives you the framework you need to work out your budget, the next step is to stick to it. It’s a good idea to make sure your budget is realistic and straightforward. Otherwise, it’s much more difficult to make budget planning an everyday part of your spending.

Budget planning can help in a few different ways, including the following:

• Budgeting puts you in control of your finances, both in the short and long term. 
• It allows you to prioritise what you should be spending your money on, and understand where you could be spending less. 
• A good household budget helps you track where you are with finances and lets you know when you need to stop spending. 
• You’ll have a solid plan that’s easy to follow and empowers you to make changes to your lifestyle and apply new financial norms. 
• You’re less likely to get an unexpected (and possibly unwelcome) financial surprise, as you’ll know exactly what you’ll be spending and when. 
• You’re less likely to get into debt as, if you stick to your budget planner, you’re less likely to overspend.
• You’re more likely to be able to save, so once you’ve put your budget planner together, it might be worth finding a savings account that suits your needs.

1. Get organised

Set aside some time to put together your budget planner and work out how you want to manage your money. While the best budget planners are pretty simple, and therefore easier to stick to, you will need to dedicate some time to creating it (try our easy budget planner below to get started). You’ll need to gather documents covering your income, outgoings and living expenses, such as bank statements, payslips, and household bills, so you have all the information to hand as you build your money planner. 

2. Calculate your income

When you’re budget planning, income doesn’t just mean your regular earnings from employment, but also other sources of income such as savings or investments. Calculating what you earn per month from all your income streams and averaging it out will give you a rough idea of how much income you’ll have each month. Don’t forget to exclude any tax you might have to pay from your income figure. This is important as you need a clear overview of what your income is before you deduct your monthly expenses.

3. Calculate your outgoings

Your next step is to calculate your monthly outgoings. It’s a good idea to categorise your outgoings so you can keep track of where your money is going. For example, you might use categories like household bills, travel, leisure and children. Once you’ve calculated your monthly outgoings, you then need to subtract this from your monthly income.

4. Work out what your living expenses could be

The figure left over after you’ve deducted your outgoings from your income is your living expenses. Living expenses include things like the weekly household shop and your mobile phone bill. If you can, it’s beneficial to use some of your money to build up an emergency savings pot, save for a house, or simply save for a rainy day.

5. Create your budget planner

Now that you have an accurate idea of your monthly spending, it should be easier to create your own budget planner. You can use our easy budget planner template below to help you get started, and you can see how it’s done in the example we’ve provided. Simply input your average income, monthly outgoings and living expenses. Once that’s done, you could even work out an achievable monthly savings target and open a savings account, knowing that you can comfortably save a certain amount of money each month. It’s important to have a clear overview of your current finances before you start thinking about adjusting your spending.

6. Monitor and adjust your spending

Sticking to your new budget plan can be the hardest part of budgeting. It’s a good idea to revisit your budget planner regularly so you stay on top of your finances and can easily identify if or where you’re overspending or saving. It’s important to keep track of your budget planner because you’ll notice any overspend more quickly and can make adjustments where you need to.

Use our free budget planner to organise your finances, get on top of your monthly expenditure, and work out where you’ll be able to make savings. You can see how it’s done with the example we’ve provided, and all you need to do is copy or print the blank budget planner, input your figures, and use the calculation at the end to get a complete picture of your finances.

Example budget planner

This example is based on the income from one adult in a small family household, with one child and no pets. As you’ll see, there is some money left over each month which could be used to grow a savings pot.

Once you’ve input all your expenses, deduct them from your total income. This will give you a total monthly and yearly budget which you can use to make more informed financial decisions.

Your budget planner

You can use this budget planner template to organise your finances.