💷 Money Management Guide

Creating a Budget

A budget is a plan for your income and costs over a period of time. You can then track what you actually spend against it (see the next section).

1. Review your income and expenses

Write down what comes in and goes out by looking back over the last few months of bank statements. Include payments towards credit cards, student loans and other debts.

2. Choose your categories

Group everything into categories, so council tax and electricity might both go under “utilities”. Common ones are rent or mortgage, utilities, groceries, meals out, fuel, holidays, presents, charity and phone.

3. Set a budget per category

Choose a monthly amount for each category. With a regular income this is usually a fixed amount, and your expenses shouldn’t exceed your income. Some months will have a one-off, like a holiday.

Not sure where your money goes? The Money Leak Finder totals your subscriptions and recurring costs, and the 3-Step Money Guide helps you see what’s coming in and going out before you set your budget.

Useful links: MMMW budgeting video · MoneyHelper budget planner · What is budgeting? (video post)

Managing a Budget

A budget is only worthwhile if you track against it: are you above or below budget each month, and are you saving what you aimed for? As I explain in this video, there are three ways to do it.

If you’re overspending

First check the budget for that category is realistic. Then try to:

• Cancel direct debits you no longer need.
• Find cheaper deals, starting with utilities and phone bills.
• Watch the little spends that add up, like daily coffees and bought lunches.
• If you need to go further, cut back on luxuries like meals out, clothes and holidays.

Useful links: MMMW budget and expense tracker (Excel) · MoneyHelper: saving money to boost your budget · Money Leak Finder

Savings

Saving isn’t about restriction, it’s about creating options. A good plan gives you breathing room and helps you move towards your goals.

Emergency savings

See the next section.

Short-term savings

For things coming up in the next 1–3 years, like holidays or home improvements. A simple easy-access account works well, so the money is there when you need it.

ISAs

An ISA is a tax-efficient way to save or invest: no tax on interest or returns. The overall ISA allowance is £20,000 for 2026/27. From 6 April 2027 the amount you can put into Cash ISAs falls to £12,000 for under-65s, while the overall £20,000 allowance stays the same.

• Cash ISA: tax-free savings.
• Stocks & Shares ISA: tax-free investing (see our Investments page).
• Lifetime ISA: for a first home or retirement, with a government bonus.
• Innovative Finance ISA: peer-to-peer lending, so higher risk.

Automate it

Set up a standing order for payday so you save before you spend. It takes willpower out of the equation.

Useful links: MoneySuperMarket easy access accounts · MoneySavingExpert best cash ISAs

Why you want Emergency Savings

Life likes to throw surprises at us, like suddenly needing a new boiler. Emergency savings are easy-access cash you can use when that happens.

The 20% comes from the idea that the average person spends 50% on essentials and 30% on non-essentials, leaving 20% for savings. That’s guidance, not a rule. If you have a near-term target, like a wedding, a house or a holiday, your goal may change for a while.

Useful links: HSBC emergency savings calculator · MoneyHelper: how much to save for an emergency · MMMW budget video

Using an App to manage your money

Plenty of apps can help you budget and keep track of your finances. Be wary of any that promise to generate money for you: if it sounds too good to be true, it probably is.

Is it safe?

It depends which app you pick. Check whether it’s regulated by the FCA (Financial Conduct Authority) to make sure it’s authentic.

Which one should I use?

That’s down to personal choice. Think about what you need it to do, and try a few. Your bank’s own app is a good start, as you’re more likely to check it on your phone than log on to a computer. My blog post “Should I use a finance app?” has some suggestions.

Useful links: App Store (iOS) · Google Play (Android)

Using a Professional Adviser

For your finances, that means a financial adviser.

What they do

They help you plan your finances in the short, medium and long term, including big events like buying a house or car, having children and retirement. Think of it as a mega version of budgeting. Most also advise on savings, investments and pensions, and on tax planning such as inheritance tax.

What it costs

Advisers charge in different ways: an hourly rate, a one-off fee for a specific piece of work, or a percentage of what you invest. Costs vary a lot, so it’s worth asking what you’ll pay before you commit. MoneyHelper’s guide to financial adviser fees explains what to expect.

Should you get one?

The only reason is that you don’t want to do your own planning. You could research it all yourself, but you’re paying for the expertise and the convenience. Many advisers offer a free first consultation, and a personal recommendation is the best way to find one.

Useful links: Check any adviser’s credentials on the FCA Financial Services Register.

Help with Debt

Feeling overwhelmed by balances and mounting interest? Debt can be draining, but you don’t have to face it alone. A few simple steps:

• Contact Citizens Advice. Free, confidential help, from legal rights to budgeting support.
• Try the snowball method. Pay off your smallest debt first to build momentum and confidence.
• Speak to a debt charity. StepChange and National Debtline offer expert advice with no judgement.
• Take one small step today. Review your spending or just talk to someone.

You don’t have to figure it all out alone. This space is here to support your financial confidence, wherever you’re starting from.

Useful links: GOV.UK guide to bankruptcy · Citizens Advice · MoneyHelper debt advice locator