Create a budget
Having a budget can bring purpose and clarity to how you spend and save your money and ultimately make you feel better about your finances. There are lots of advantages of budgeting and it’s simple to get started.
Here’s how to create a budget. Step one: check the exact amount of money you earn after tax. This can be more difficult if you’re self-employed or freelance but look at previous months, work out an average and then leave space for unexpected delayed payments or a gig falling through. You can use an online calculator to help.
Next, calculate your essential outgoings: rent or mortgage, council tax, gas and electricity bills, building insurance, WiFi, TV licence, phone bill, the cost of your daily commute and the average amount you spend on groceries.
If you’re a Starling customer, you can check scheduled payments or work out average outgoings using your Starling app. In the payments section of the app - all direct debits and standing orders are listed together. You’ll find a monthly breakdown of outgoings for groceries and transport in the Spending Insights section of the app.
Your monthly income minus your essential outgoings is what you have left to save and budget. That could be for a weekend away or a taxi after a night out, going to restaurants or the cinema, buying birthday presents or subscribing to Spotify, perhaps investing more in your pension. All the things you might want to spend your money on.
As a budget planning tool, have a look at the Spending Insights categories in the Starling app: Bills & Services, Groceries, Eating Out, Transport, Holidays, Shopping, Lifestyle, Entertainment and Gifts. Set a realistic amount for each category, taking into account how your spend might change if you have lots of birthdays all in one month or if you spend more over the summer or around Christmas.
You should end up with a list of how much you can afford to spend for each category, which you can check up on each week by scrolling through your Spending Insights. If you spend money on something and you want to change the category, for example from Shopping to Gifts, you can do so in the app.
As part of your budget, you might also want to calculate an ideal daily amount to spend. Your actual spend will go up and down - sometimes more, sometimes less. But you can quickly check in on how you’re doing by comparing your daily figure to the total on your Starling homescreen. We do the maths for you by adding up your daily outgoings. Daily spend is also listed for previous days in the transaction feed - swipe up for iPhone or press the teal button for Android.