A budget is just income minus outgoings
At its heart a budget is one subtraction: what comes in, minus what goes out. The value is in the detail — seeing exactly where the money goes turns a vague worry into a plan you can act on.
The 50/30/20 starting point
A well-known rule splits after-tax income three ways, as a first draft you can bend to fit:
| Bucket | Share | Examples |
|---|---|---|
| Needs | 50% | Rent, bills, groceries, transport |
| Wants | 30% | Eating out, subscriptions, hobbies |
| Savings & debt | 20% | Emergency fund, investing, extra repayments |
Why writing it down works
Small, repeated costs are the ones that slip past — a couple of subscriptions and a few deliveries can quietly cost more than the rent difference between two flats. Putting every line in front of you is usually enough to fix the leaks.
Frequently asked questions
How do you make a monthly budget?
List your monthly income, then subtract fixed costs (rent, loans, bills) and variable ones (food, transport, fun). What is left is what you can save or spend freely. This planner does the maths as you type.
What is the 50/30/20 rule?
A simple split of after-tax income: about 50% to needs, 30% to wants, and 20% to savings and paying off debt. It is a starting point, not a strict law — adjust it to your life.
How much should I save each month?
Aiming for around 20% of income is a common target, but even 10% builds a habit and an emergency cushion. The key is saving something every month, automatically if you can.
What is the difference between fixed and variable expenses?
Fixed expenses stay about the same each month (rent, loan payments, subscriptions). Variable ones change with your choices (groceries, eating out, fuel) and are where a budget gives you the most room to adjust.
Why is a written budget better than guessing?
Writing it down makes spending visible, and small leaks — subscriptions, daily coffees, delivery fees — add up fast. Seeing the totals is usually enough to change them.