Build a better budget 

Our guide to creating a budget is a great first step towards managing your money.

The cost-of-living crisis has left more than 7 million people in the UK struggling to pay their bills. So if you’re worried about money, you’re certainly not alone.  

“When you’ve got more cash going out than coming in each month, taking control of your finances can feel like an impossible task,” says SWLLC’s Senior Money Adviser, Swabra Natabi. 

“But writing everything down in black and white and drawing up a budget can help you keep track of where your money’s going, and where you can make savings.”

Whether you want to get out of debt, slash your bills or build a bit of a buffer for a rainy day, it all starts with a budget. Here’s how to take those first steps towards better peace of mind.  

Write down all your incomings 

Grab a pen and paper and write down everything coming in and going out of your account each month.

If you prefer to use an app or website, there are some good free options out there: Spending Tracker is an easy-to-use option, while MoneyHelper’s online tool will help ensure you don’t miss anything.  

When you start writing your budget, make sure you include all sources of income, including any benefits you receive, your salary, regular gifts from friends and family, and payments such as child support.  

Look back over the past year’s transactions on your banking app or statement, so you remember any payments that come in less regularly than once a month.  

Write down all your regular spending 

This one is a bit trickier to track. Carefully go through your bank statement to make sure you catch every regular payment, including bills that aren’t coming out every month.  

For example, if you pay your water bill every six months, add the two payments together and divide the total by 12 to work out your monthly spending.

Look out for payments that are often overlooked, including: 

  • Subscriptions to things like magazines and TV services 
  • Insurance for your pet, car or phone 
  • Your annual MOT 
  • Birthday presents  
  • After-school activities 
  • Boiler servicing 
  • Personal grooming (think: haircuts and nails) 
  • Pension payments 

You might be surprised to discover what’s draining your wallet when you write everything down. If you’re spending more than is coming in, it’s time to work out where you might be able to make savings.   

Categorise your spending 

Once your budget is down on paper, it can be helpful to start putting things into categories. These might include household bills, entertainment, travel costs, insurance and debt repayments.  

This will help you work out which outgoings are essential (like buying groceries or paying off the minimum on your credit card), and which ones you might be able to cut back on. Now it’s time to take action… 

Think about how to cut your costs 

It can feel daunting to trim your spending, especially if your budget already feels fully stretched. But there are small ways you can cut back that won’t leave you feeling deprived.  

To get you started, try our guide to 8 ways to cut your costs, and see how much you can save. Tips include acing your yellow-label shopping, slashing subscriptions and trimming daily spends. 

Look at ways of bringing in more money 

Chances are that you’ve already thought long and hard about how to bring in more money. But there could be some avenues you haven’t considered.  

The first step is to work out whether you or someone else in your household might be able work extra hours to boost your budget. Or perhaps they might be able to get a pay rise (asking can’t hurt!). If you have adults at home who aren’t contributing to the household, ask them to chip in. 

You can also try these tips: 

  • Cast a critical eye over your wardrobe. Can you sell anything on eBay or Vinted that you don’t wear very often?  
  • Think about things you might be able to rent out to make some extra cash. You can rent out all sorts of things these days, including your spare room (check your accommodation terms first), driveway, storage space, car or tools. 
  • Use cashback credit cards and rewards to earn money on your spending. For example, Go Compare offers up to £300 of rewards when you switch insurance with them. You can also bag great rewards when you switch bank accounts.  
  • Find a side-hustle you can fit around your existing commitments. A few of the options available to you include ironing services, babysitting, exam invigilating and life-modelling. You can also help your local council with things like vote-counting during an election. Find more ideas like these on the Money Saving Expert site. 
  • If you’re on a low income, you might be eligible for a grant to help with basics such as bedding and school uniforms.  

Don’t go it alone 

If you’re struggling with your finances, it’s better to ask for support sooner rather than later. You don’t have to do this on your own. 

Our regular webinars and workshops include sessions on how to deal with debt and slash your bills. We also offer local drop-in events where you can talk about your cost-of-living concerns.  

If you want to become a real financial whizz, you can take a free course on managing your finances. Or, if you’re worried about debt, you can get free expert advice from Debt Free Advice online or by calling 0800 808 5700. 

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