For many people, the word “budget” instantly triggers thoughts of restriction, sacrifice, and spreadsheets.
But the reality is very different.
Budgeting isn’t about cutting out all the things you enjoy, it’s about understanding where your money goes, and making sure it’s working for you (not against you).
If you’ve ever reached the end of the month and thought:
“Where has all my money gone?” …you’re not alone.
Whether you’re earning £1,500 or £5,000 a month, if you don’t know your numbers, it’s easy to feel out of control. And that’s where good financial planning starts — not with investments or pensions, but with clarity.
The 3 Key Buckets of Your Money
When working with clients, I often encourage them to break down their spending into three simple categories:
1. Essential Expenditure – Aim for 70% Essentials like mortgage or rent, utilities, council tax, transport, groceries, and debt repayments.
2. Saving – Aim for 20% Short term, medium term and long term. This is directly linked to your goals. Short term is there to fund things through the year and to ensure your emergency fund is kept topped up. Automate your savings to make things easier.
3. Fun Fund – aim for 10% This is to fund the things you want to do in the month and to ensure life is enjoyable. It might be clothes, eating out, Hobbies, streaming subscriptions or going to gigs. Once this is used up, you are done for the month
This model helps people realise two things:
• They often spend more than they think on “wants.”
• Their financial goals are usually left until last — or not considered at all.
Whilst the % aims are there for a guide, it will quickly show where the bulk of your monies are going and help to readjust to where you would prefer to be.
Automate It — So You Don’t Have to Think About It
One of the easiest ways to stay on top of your finances? Automate your savings — and do it straight after payday.
Set up standing orders or automatic transfers to different pots or savings accounts. Think of it as “paying yourself first” before life’s little extras chip away at your balance.
Some useful pots to set up:
• Christmas & birthday gifts – no more last-minute panic spending or post-Christmas blues
• Car servicing/MOT – avoid unexpected bills
• Holidays & weekends away – enjoy them guilt-free
• Pets – For those incidental costs such as groomers, new beds, leads/harness.
• Home maintenance or annual insurance renewals
Even saving £20–£50 a month into each pot adds up and helps avoid dipping into credit when those things come around.
Most banks now offer “pots” or “spaces” to help you manage this easily and once it’s set up, you barely notice it’s happening.
Why Knowing Your Numbers Matters
You don’t need to track every penny to get value from budgeting.
But even a basic understanding of your income and spending can help you:
- Reduce financial stress
- Spot hidden costs (like forgotten subscriptions)
- Avoid “lifestyle creep” as your income increases
- Make space for important financial goals like retirement, saving, or protecting your income
Practical First Steps
If you're new to budgeting or haven't done it in a while, here are a few small steps that make a big impact:
• Check your last 3 months’ bank statements – group expenses into Essential spending, Wants, and Goals.
• Track your subscriptions – cancel anything unused.
• Use budgeting apps or templates – they take the headache out of number-crunching.
• Automate your savings – even small, regular amounts build up quickly.
• Set one small financial goal – like building a £500 emergency fund or saving £50 a month.
Need Help?
As a local financial adviser based in Aberdare and Cardiff, I help people get clear on their finances and build a plan that works in real life bespoke to you, no lectures, no jargon, no judgment.
If you’d like a free initial consultation about how to start taking control of your money, feel free to get in touch.
Contact us today to discuss a tailored financial plan.
You can book your online free initial consultation HERE