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budgeting for beginners

Written by: Annie Zygmunt

Budgeting for beginners - tips and templates included
Why do we need to budget?

No matter how much you earn annually, it’s always a good idea to budget.

Budgeting can save us a lot of stress. As long as we plan for what we want, need, and may need, we can stop living our lives paycheck to paycheck. It requires thinking not only about the present but also about the future. When you budget, it becomes easier to lead a healthy lifestyle and treat yourself ever so often, while managing to keep stress levels as low as possible. No more stressing about what your next meal is going to be! So check out some of these budgeting tips:

First thing first, and everything else follows:

First thing you’ll want to do is figure out how much you get paid (after tax) each month. For the purpose of this article we will use the lowest possible 2020/2021 salary as according to ONS, which was found to be £13,803 annually – or £1,150.25 monthly.

After this, you’ll want to make a list of the things you will need to pay for each month. Here are a few examples you may use:

  • Food – include only the amount that you’re planning to spend on groceries, as well as any pre-planned take out e.g. food that you order to work because you know you won’t have time to make lunch at home to take to work
  • Travel – bus/train/taxi fare or petrol
  • Home necessities – toilet paper, cleaning chemicals, shampoo, toothpaste, etc.
  • Bills – rent, water, gas, electricity, etc.
  • Pets (if applicable) – food, litter/bags, etc.
  • Medical bills (if applicable) – any medicine that you pay for, including prescriptions and over-the-counter
  • Any others you may think of that apply to you

Below but in a separate pile, make a pile of things you may want to pay for. Here are a few examples:

  • Birthday/Holiday gifts
  • Gym – gym membership or any gym equipment you’re planning to buy at home.
  • Going out with family/friends
  • Clothing – any clothes you may want to buy
  • Beauty products – including any makeup, hairdressers/at-home hair dye, nails etc.
  • Subscriptions – this includes services such as Amazon Prime and Netflix
  • Again, any others you think may apply to you

After having made the list, take off your needs from your wages. Note that number down and then take away the wants. Then you can do one of two things – either put the whole amount that you have left into savings (be it into an online bank account of piggybank), or save half of it by putting it into savings and leave the other half in your wallet/bank account to treat yourself throughout the month. Of course the first option helps you save more, but the second option may be what helps you keep going with the budgeting plan.

Types of budgeting:

This article will introduce you to three types of budgeting:

  • Zero Sum Budget – According to Dave Ramsey, a Zero Sum Budget is where you budget your income and expenses so that the end result is zero. Now, this doesn’t mean that you’ll be left with zero money at the end of the month. It simply means that you take your income, take away your expected expenses, and put the rest of the money into savings.
    For example if your income is £1,200 a month, and your overall expenses (both wants and needs) add up to £1,000, then you calculate that the leftover £200 will be put into savings.
  • Cash Based – This method requires all of your expenses to be taken out of your bank account and put into envelopes. For example you may have envelopes titled “rent”, “bills” (water, gas, electric etc.), “debt”, “food” (e.g.: just groceries or groceries and takeout) etc. You can put the money back into your account the day before it needs to come off if you pay online (for example if you have an online direct debit set up for rent.)
    If you’ve used up all the money from one envelope before the end of the month, you may need to use the money from another envelope, and re-evaluate the amount of money you’ll be putting aside for each envelope.
  • 50/30/20 – This method requires splitting the expenses into percentages, and therefore may be a bit harder to start with (coming from someone who is also a budgeting beginner!). This is because it requires a basic separation of funds into 50% needs (rent, mortgage, food, transport, healthcare, debt payments, etc.), 30% wants (entertainment, subscriptions, takeout/restaurants, beauty services, gym, etc.) and 20% savings (savings, investments, emergency fund, etc.)

There are many more budgeting method available that you can read about online.

Budgeting sheet templates:

There are plenty of budgeting sheets you can find online. Below you’ll find a few examples. You can either edit those to suit your needs, or make your own by using these as an inspiration.

 Prefilled or Blank             Weekly Spending              Organised Budgeting           Basic Budget 4 Week Split             Blank Budgeting

Which one you pick may depend on what type of budgeting you’d like to use.


So really, the main tip is start from the beginning, and everything else will fall into place. Figure out how much you earn, take away what you must spend, figure out how much you’ve got left and decide how much of it you want to put away (save) and how much you can allow yourself to spend on things you want.

Sounds a bit easier this way, doesn’t it?