Income is money you have coming into the house and expenses is everything that goes out. This is regular monthly bills and anything you spend. It is the foundations to any budget and its important that you list everything honestly.  

Income example

Same with your outgoings. The mortgage payments, Netflix, the cheese of the month club. Write it all down. When I did mine, I went onto my online banking and went through every charge from my account for the last 6 months. That takes into account quarterly direct debits and anything you pay bi-annually.

Expenses example

* Side note, doing this will let you see any charges that you didn’t realise were still outgoing. If you don’t need/use it then cancel it. We've all signed up for a free trial in our lifetime but perhaps forgot to cancel it. Even if it’s only for £5 a month, that’s £60 a year back in your bank account.

Next look at your occasional spending. This is things like your weekly shopping, how much you spend on clothes or entertainment goods. Do you smoke? How much to you spend a week? Nights out? Take outs? Write it all down and BE HONEST. It’s the only way you can get a real true look at your budget.

Now add it all up. If you get paid weekly, add it so that you have a monthly total in each column. From there take the total expenses away from your income and you have what would be your "disposable income". You can then divide that further so you have your left over income for each week.

* Please note these are completely exaggerated numbers. Just for an example.

If your monthly expenses are more than your income, then you will be getting yourself into debt which is never a good thing. You have to see where you can cut your spending down, or perhaps do something to bring more money in. If they are less then yay, but can you make even more savings?

The little things make a huge difference. 

For example, do you have Sky TV? Do you know that you can the majority of the best Sky channels on Now TV? And they have offers all the time for things like movies or the kids packages. We have Now TV and pay £4.99 at the moment for the movie add on a month. I watch a lot of movies so that fiver a month is awesome for me, but when my offer ends at the summer and it goes back up to £11.99 then it will be getting cancelled. As although I enjoy them, the price doesn’t make it worth it for me. If I get another offer, then great but if not then its ok too.

We don’t have regular TV in our house. This means that we don’t pay for a TV licence. We have no need. I couldn’t tell you the first thing about any of the I’m a celebrity dancing on x-factor ice stuff. I only know about the GBBO winners of the past as its on Netflix and I haven’t the foggiest who half the celebs are these days from Essex or otherwise. Instead, we have Netflix which lets us watch shows on demand, some movies, and the occasional true crime documentary (which I love!). And our Netflix is the basic one too. Why spend a tenner for multiple screens at the one time when the reality is we only need the one. If M wants to watch something on there, then I will go read on my kindle or watch Now TV. And vice versa if I want to watch something like Man Down, he will play on his X-Box or go on the laptop and read rando stuff on Reddit. I think in the past year of lock down we have had this overlap twice total, so it’s not really an issue having the one screen package.

Its all about finding clever ways to cut costs and to save where you can.

Food shopping is no different. Every month we sit down and work out a meal planner. We have a look at what we have in the freezer and pantry and build a meal plan around that. Then we see what we would like and write a shopping list for those extras. We do one big shop once a month which lets us take advantage of getting bulky items like washing powder delivered (I don’t drive) and we book a delivery on a weekday when they are cheaper. We don’t go for the same supermarket each time either. I will price compare everything down to the table salt and always go for the cheapest supermarket. This is how we have managed to keep our monthly shop to around £80 a month for the two of us (one of which is a teen who eats like 2 grown men).

I keep track of everything in my planner. I write down all the income and expenses and see where I can save and what can be taken out completely. I also have in there when things are due for renewal so I can shop about for the best deals.

I made this printable to stick in my planner as I could never find one I liked and each week I add things that I have spent so I keep an honest view of my spending. You can download a your own copy HERE but please only use it for your personal use. I've made it 2 months per A4 page so you can save on paper too.

If your more tech minded there are lots of apps that help you track your spending. I have the Monefy app on my phone (free from Google store) that I used to help keep track of spending if I was out and about (pre-covid).

And there you have it, how to make a budget and some tips on how to save the pennies.