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How to set yourself a budget

By | April 24th 2020

Setting a budget is something a lot of us have tried and may have struggled to stick to, but it really is one of the most important steps if you want to feel on top of your money. 

We also know that this is a really strange time. Your income and the way you spend are both probably affected, so your usual budget may not seem to work anymore, but that’s ok. Take this time to reassess your spending and your habits and then you can start thinking about what budget feels right for you now.

Once you know how much spending money you’ve got and how long it needs to last for, you can decide if you want to break this down into a daily, weekly or fortnightly budget. 

If you’re used to getting money weekly, it might be good to split it into a daily budget. If you get paid once a month, you might be better off splitting it into weeks. 

Setting yourself a spending limit or spending budget could help in two ways; it could make you more conscious of your day-to-day spending which in turn, could help you spend less. 

You can use some of our tips below to help you feel on top of your money again.

We know that this is a really strange time. Your income and the way you spend are both probably affected. Take this time to look at what you need to prioritise and then you can start thinking about what budget feels right for you now.

What should my budget be?

Write down all the things that you usually spend your money on and the expected spend (e.g. groceries, shopping, etc.) in order of priority. Try splitting out these costs into 'essentials' and 'nice to haves'. 

Essentials examples

Weekly food shop - £62 (ONS, 2020)

Nappies - £6 (Money Advice Service, 2018)

Household cleaning products - £2.50 (ONS, 2020)

Nice-to-haves

These are unique to each of us. We all need a treat every now and again so maybe set aside a little of your budget, so you can treat yourself to something nice. 

Once you’ve done this it should give you an idea of the amount of money you could expect to spend and an idea of where you could cut back if you need to.

Could you spend less?

If you want to go one step further when thinking about your budget, why not set yourself a small challenge and see if you can save a little, by coming in under budget. Think of this like building a little saving into your budget.

The thought of saving might not seem feasible right now, but if you can continue to put even small amounts aside, it could give you some peace of mind.

If you are one of the many people lucky enough to be working at home, you might be able to save the money you would have spent on transport, takeaway lunches and coffees for example.

Know your goals

There are probably loads of things that you’re dreaming of doing once lockdown is over. Some of them might not require money and some of them might. So if you’re dreaming of travelling to far off lands once travel restrictions are lifted, want to splash out on some new trainers, or just want some money to fall back on later, starting to put a little money away now could help in the long run. Whatever you want to save for, even putting a little away can help keep you focused on the future and give you something to look forward to.

If you’re with Bó you can set a Spending Budget and Bó Underspend Goal in the app in a matter of seconds.

If you don’t have Bó you could always use a spreadsheet that records your spending (make sure you keep all your receipts) and deducts it from your budget so that you can see how much money you have left. 

Need more information on how to figure out your spending money so you can start setting a budget? Check out our other blog here.

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