The Motley Fool
My Wallet Hero

A budget template to keep your finances in order

We live in an era where our lives are laid out for all to see on social media. It’s likely you’ll have at least one of those friends whose timelines are packed with evidence of them enjoying the finer things in life, yet you know they earn the same or maybe even less than you do.

Are they really good at managing their money, taking advantage of special offers and seeking out excellent advice such as our budget travel tips? Or are they simply living from one credit card to the next?

As you start comparing notes, you realise it’s not rocket science. You simply need a budget and some discipline. 

This means taking your income and deducting all your expenses. Doing so allows you to see if you have spare cash or whether you need to tweak your spending. A monthly budget is a good place to start. 

Work with a monthly budget

A monthly budget could help you to take the power back in terms of your finances. It’s a snapshot of where your money is going and it also makes you more aware of your spending. You will quickly find out whether you’re overspending in certain areas, or not paying enough attention to others.

By subtracting the total of your expenses from the total of your income, you’ll soon see whether there is a surplus or a deficit. A surplus means you should have money left in the bank at the end of the month, while a deficit means your expenses are more than your income, and you should consider ways to increase your income or cut down your expenses. 

Below, we’ve provided an example of a budget template to help you monitor your income and expenditure. To use the budget template, begin by noting all of your income. We suggest you use your income after tax and deductions so you have a clear idea of how much is available.

Next, you’ll need to note all of your monthly expenses, which are divided into two sections: fixed and variable. Fixed expenses are those items that are exactly the same every month, like your rent or mortgage and your council tax. Items should only go in your variable section if the amount fluctuates each month, like spending on clothes, or if it’s an unusual spend, like a new computer.

The template is populated with a wide variety of common expenses. It’s just an example to get you started, and you should edit it to suit your needs. 

Income 

Salary/wage (after deductions)

£

 

Other

£

 

Total income

£

 

Fixed expenses

Mortgage/rent

£

 

Utilities

£

 

Council tax

£

 

Car finance 

£

 

Other transport costs

£

 

Phone

£

 

Internet

£

 

Subscriptions

£

 

Education

£

 

Private health care

£

 

Insurances

£

 

Savings

£

 

Investments

£

 

Bank costs

£

 

Charitable donations

£

 

Credit card repayments

£

 

Other debt repayments

£

Variable expenses

Food and household shopping

£

 

Fuel

£

 

Hobbies

£

 

Entertainment

£

 

Clothing

£

 

Holidays

£

 

Ad hoc expenses

£

 

Total expenses

£

 

Income less expenses = £

Monitor your weekly spend

It’s a good idea to take stock of your spending on a weekly basis and check whether your monthly budget is on track. It’s a good time to see whether you’re saving cash, or whether it’s time to rein things in and make small adjustments to your spending behaviour. 

Keep an eye on your daily expenses

You may have the best intentions to stick to your monthly budget, but that doesn’t mean much if your daily spending trips you up. If, for example, you know you don’t have the spare cash for a Costa coffee every day, yet you still find yourself at the counter every morning like clockwork, you might just be spending more than you earn.

While it may not be necessary to go super frugal, it’s important that you monitor your spending on the things you enjoy so it doesn’t spiral out of control. Keep an eye on your daily spending – you’ll soon see if you’re spending more than you thought and you’ll quickly realise what’s essential and where you could save money.

Honesty is the best policy

One of the most important things to remember when setting up your budget is to be honest about your actual spending. Even if the reality of your current spending scares you, it’s far better to be honest with yourself to get your spending under control and maximise your chances of adding those holiday pictures to your social media timeline. This is your budget, so get all the information on there!

If you begin using the budget template and find out there’s a deficit, consider practical ways to reduce your spending or make your money go further. If you have a surplus at the end of the month, it could be used to build up your savings or your emergency fund.

Educating yourself on personal finance and understanding the financial products that you use everyday can make the difference between comfortable finances and constant stress. At MyWalletHero, we aim to make learning about personal finance rewarding and fun.

MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the FCA, and we are permitted in this capacity to act as a credit-broker, not a lender, for consumer credit products (our FRN is 422737). The Motley Fool Ltd does not have permissions for, and does not advise on, investment products and services, but may provide information on investment products and services.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.