A simple monthly budget that works

Budgeting and saving · 3 min read · Updated

In short: a budget is a plan for your money. Start with what you actually take home, list what you spend, set aside savings first, and check in once a month. It doesn't need to be perfect to help.

1. Know your take-home pay

Use the amount that reaches your bank account after taxes and deductions, not your salary before tax. If you're paid by the hour or every two weeks, our salary converter turns it into a monthly figure.

2. List what you spend

Look at the last two or three months of bank and card statements. Group costs into:

Don't forget costs that come once or twice a year, such as fees or insurance; divide them by 12.

3. Pay yourself first

Decide on a savings amount and move it to savings on payday, before you spend. A common first goal is an emergency fund for unexpected bills; build it a little at a time.

A popular rule of thumb is 50/30/20: about half of take-home pay for needs, 30% for wants and 20% for savings and extra debt payments. It's a starting point, not a rule. In cities with high rents, needs often take more.

4. Check in each month

Try our monthly budget planner to see your numbers in one place. It runs in your browser and saves nothing.

Handy tools

General information, not financial advice. Rules, fees and rates change and depend on your situation. Check with your bank, the provider or a qualified professional before you decide.

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