How to do a simple monthly budget in the UK (with a free spreadsheet)

By Khorne Projects · 29 October 2026 · about 6 minutes' read

If you've ever reached the end of the month and wondered where it all went, a budget is the simplest way to find out. It doesn't need to be a twelve-tab masterpiece. One honest month, written down, is usually enough to show you what's really going on.

Here's a straightforward way to do it with your banking app and a spreadsheet. A notepad works just as well.

Before you start: three things to have to hand

MoneyHelper, the free, impartial guidance service backed by the government, suggests having these nearby before you fill in a budget:

• payslips (and any benefit statements)
• bank statements, or your banking app
• your latest bills, such as Council Tax, energy, water and your phone

Then decide who you're budgeting for: just you, or the whole household. Either is fine. Just stick to it, so your income and spending cover the same people.

Finally, pick a start date. The 1st of the month is tidy, but starting on payday often makes more sense. If you get Universal Credit, that's a natural start too: it's paid once a month, on the same date each month after the first payment (in Scotland you can choose to be paid twice a month).

Step 1: Write down what actually comes in

Use the money that lands in your account, not your salary before deductions. Your take-home pay already has Income Tax, National Insurance and things like pension contributions and student loan repayments taken off, so you don't need to work any of that out yourself.

Then add anything else that arrives regularly: benefits, child maintenance, and any side income from selling, tutoring or odd jobs.

If your income goes up and down, MoneyHelper's tip is to budget for your lowest typical month. That way the important costs are always covered, and a good month becomes a bonus you can save or plan with.

A note on side income. It's worth keeping a separate list of what comes in from it, because HMRC looks at your gross income from things like selling and casual work, before any costs. You get a tax-free trading allowance of up to £1,000 a year. If your gross trading income goes over that, you need to register for Self Assessment, and either way gov.uk says you must keep records. The current tax year runs from 6 April 2026 to 5 April 2027.

Step 2: List what goes out, starting with the bills that matter most

Start with the priority bills. MoneyHelper describes these as the ones that can cause the most serious problems if they go unpaid, because they can affect your home or lead to legal action. They include:

• rent or mortgage
• Council Tax (Rates in Northern Ireland)
• gas and electricity
• water
• your TV Licence

Next, add your other regular bills: mobile, broadband, insurance, subscriptions and any loan or credit card repayments.

Last come the everyday costs: food shopping, travel, petrol, toiletries, school costs and nights out. This is where most budgets go wrong, because we guess low. Scroll back through a month or two of your banking app and use what you really spent.

Two UK quirks are worth knowing:

• Council Tax is usually split into 10 monthly payments, not 12. So there are two months a year when it doesn't go out. Don't let them fool you into thinking you've got more spare money than you have. If you're struggling, gov.uk says your council can help, for example by spreading the bill over 12 months instead.
• In Scotland, water is usually paid through Council Tax, so you may not have a separate water bill.

Step 3: Don't forget the once-a-year costs

The bills that really knock a budget off course are often the ones that only turn up once a year: car tax and the MOT, insurance renewals, birthdays, Christmas, the dentist, or a new school uniform.

Add up roughly what these cost you over a year, divide by 12, and put that in your budget as a monthly line. MoneyHelper's own budget planner works the same way. You can enter a yearly figure and it breaks it down into a monthly average.

Step 4: Plan it, then check it

This is the bit that turns a list into a budget.

1. At the start of the month, write a planned amount next to each line.
2. As the month goes on, or at the end, fill in what you actually paid, straight from your banking app.
3. Look at the difference on each line, then at the total: money in minus money out.

You don't need to log every coffee. Sensible groups like "food shopping" and "eating out" are enough to show you where the money really goes.

Step 5: What the number at the bottom tells you

If you've got money left over, that's great. A good next step is an emergency fund. MoneyHelper's rule of thumb is three to six months of essential outgoings in an instant-access savings account. It also stresses that any amount helps. If you have expensive debts, such as credit cards, an unauthorised overdraft or payday loans, it says paying those off first is usually cheaper in the long run.

If you're only just breaking even, look at the regular bills first, because changing a bill once saves money every month. Check whether any contracts have ended. Check whether you're due a Council Tax discount, too. You get 25% off if you live on your own, or if everyone else in your home is "disregarded", for example full-time students. You have to apply for it, though. If you're on a low income or get benefits, you may also be able to get Council Tax Reduction.

If more is going out than coming in, don't panic, but do act early. Gov.uk lists free, anonymous benefits calculators (from entitledto, Turn2us and Policy in Practice) that show what you might be entitled to. If you're behind on bills or worried about debt, MoneyHelper's debt advice locator can point you to free, confidential help. MoneyHelper also suggests talking to the company you owe before you miss a payment.

A free spreadsheet to do it in

If a month goes well and you want to keep going, there's also a 12-month UK Household Budget Planner (£3.50) and a UK Side Income & Expenses Tracker for the 2026/27 tax year (£4.50). But honestly, the method matters far more than the tool. MoneyHelper's free online budget planner or a pen and paper will do the job too.

Useful official links

• MoneyHelper: Budget planner
• MoneyHelper: Bill prioritiser
• MoneyHelper: Emergency savings, how much is enough?
• GOV.UK: Council Tax, who has to pay (discounts)
• GOV.UK: Council Tax, paying your bill
• GOV.UK: Benefits calculators
• GOV.UK: Tax-free allowances on property and trading income

This is general information, not financial, tax or benefits advice. Rules can change, so check the linked official pages for your own circumstances. Written by Khorne Projects with AI assistance, and checked against the official sources above on 29 October 2026.

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