WTF is a Budget?
Simple budgeting methods, the 50/30/20 rule, and why I’m finally starting
Hi there,
Where We’re Starting
Generally, when I check my bank account halfway through the month, the balance is either on, at, or beyond zero. I know who my bills, insurances, and subscriptions are with. I know roughly what food and fuel will cost. I am also aware when my money departs for the heady heights of someone else’s bank account
But what I don’t really know is this: where does it all actually go?
The Reality Check
That might sound counterintuitive considering what I have just said. On paper it may seem like I have a good handle on where the money goes. The problem is that in practice, I have never properly tracked it, mapped it, or considered where I could make efficiencies. The result of which means for over 20 years I have been living in a cycle of chasing:
Chasing debt
Chasing the next payday
Chasing people my age who seem to have it all figured out
Basically chasing my tail.
What I have now come to realise is: I need a budget. Not the half-hearted, lip-service approach I have pretended to keep before, but an actual budget. A real one.
So WTF is a Budget?
I came across US financial guru Dave Ramsey recently, and he sums it up perfectly:
“If you don’t tell your money where to go, you’re going to wonder where it went.”
A budget is just a plan for your money over a given period.
That’s it. Nothing more complicated than that. When money comes in, you give every pound a job.
A Simple Starting Point: The 50/30/20 Rule
One of the easiest frameworks I have found is the 50/30/20 rule. In theory, it splits your money like this:
50% → Needs (rent/mortgage, bills, food)
30% → Wants (nights out, subscriptions, takeaways)
20% → Savings or debt repayment
It’s not perfect (and I’ll explain why in the full edition), but it’s a helpful compass for beginners.
Methods I’m Testing
There are a number of ways to budget — spreadsheets, apps, envelopes, and more. The key thing is to pick something you will actually stick to that fits your vibe.
I am going to test two at once:
An app to track my spending in real time
A spreadsheet to capture every spend manually
More on both below the paywall and what my budget actually looks like (spoiler alert - I am miles off the 50/30/20 rule).
Why It Matters
A budget puts you back in the driver’s seat. It helps you:
See where your money actually goes
Stop feeling guilty about spending
Make progress towards long-term goals
This isn’t about restriction. It’s about clarity and choice.
What’s Next
During this week’s research I have come across the term ‘emergency fund.’ This term is brand new to me and deserves a whole section of its own — so I will cover that in next week’s newsletter.
Your Turn
Try setting up a very simple budget for the next month. Even if it is just a list of income and outgoings. This will be step one of the Beginning Money journey.
TL;DR
A budget = a plan for your money
The 50/30/20 rule is a simple starting point (but far from perfect at this stage
Pick a method that fits you — app, spreadsheet, or both
This Week I Learned: NatWest Group found that nearly 2 in 5 UK adults (39%) do not budget at all.
👉 Want to see how I am setting up my accounts, where I land vs the 50/30/20 split, and what “zero-based budgeting” looks like? Keep reading below (paid subscribers only).
Hi there,
Facing Reality: My Numbers
In the free edition, I mentioned the 50/30/20 rule. Great in theory. But in practice, not so much for me at this time. If anything, it is more of a pipe dream, although it does highlight a great rule of thumb for where I need to get to. The 50/30/20 rule provides a ‘North Star’ for necessities, living life in the now, and long-term wealth creation.
When I have created my very first budget this month, the numbers are stark. Right now, my fixed costs (mortgage, bills, food, fuel) swallow up about 90% of my income. Which shows I am some way away from the neat split. My life is more like 90/07/03
On first look, these figures made me a little queasy. But here’s the thing: once you know the numbers, you can actually make a plan. Denial is what keeps us stuck. Even though I am way beyond the ‘needs’ threshold for good money management, the 50/30/20 rule has given me a benchmark to work towards and get closer to this margins. What I need from this experience is diligent tracking, identify efficiencies, and consider how best to allocate funds every month in a way that is both empowering and also does not take the fun out of it.
Building My Budget Structure
I am testing something that feels a bit extreme, but it is giving me clarity and a great deal of calm: separate accounts (or “pots”) for each area of spending. I may be able to streamline the process over time as I get more used to budgeting. This is how I have set mine up, using a mixture of current and savings accounts:
🏦 Core Accounts
Landing account → wages in, bills out
Food & fuel → essentials only
House maintenance → DIY, repairs, emergencies
Car maintenance → MOTs, tyres, breakdowns
Emergency fund → more on this next issue
Needs margin of safety → 5% buffer when life costs more than expected
👨👩👧 Family & Lifestyle
Clothes → no more random overspend
Days out → planned family fun
Birthdays → no last-minute panic of where the money is
Christmas → spread the cost over the whole year
Annual subscriptions → Netflix, Amazon, etc all accounted for
Eating out → guilt-free, but strictly capped
Clubs → kits, fees, and weekend match days
Haircuts → trims, not shocks at the till
Home improvement items → small upgrades without raiding savings
Wants margin of safety → 5% buffer in case anything crops up or prices increase.
🚀 Long-Term Safety & Goals
Holiday saving → sun, sand, and stress-free planning
6 months expenses → the big safety net for real peace of mind that the emergency fund will eventually fold into
This might look like overkill, but here’s the benefit: I can glance at a balance and know instantly how much is left for that category. No mental gymnastics or wondering how I can afford something I invariably forget about until it is upon us, such as car bills.
Now this breakdown of accounts does not necessarily apportion core accounts as needs; family & lifestyle as wants; or long-term safety & goals as all savings/debt. For example, the landing account will be used for investing and paying credit card bills.
I haven’t set up separate accounts for these because the money will flow straight out of the landing account at the beginning of the month as a bill. This week I have come across countless references about paying yourself first when it comes to investing, which I will break down in a subsequent newsletter. Watch this space...
Zero-Based Budgeting
Alongside the pots, I am trying zero-based budgeting. It means every single pound has a role. Nothing sits idle. Everything that comes in is given a job, which results in the final balance in the landing account going to zero every month. Not through wastage, but through carefully planned fund allocation to maximise opportunities to succeed.
It is like playing Tetris with your money. At first it feels awkward, but once everything fits, there’s a strange sense of control. I have found this to be incredibly exciting, yet calming.
We talked about the game of money in the What is Personal Finance newsletter. Creating a budget feels like the first rung to achieving a positive outcome to the game.
The Methods: App vs Spreadsheet
App: Quick, automatic, and gives insights. But easy to ignore because it runs in the background.
Spreadsheet: More effort, but forces me to engage with every spend.
For beginners, apps are brilliant as they run in the background tracking your spending. But if you want a more hands-on approach while getting to grips with budgeting, spreadsheets may fit the bill.
The App Method
The app I have chosen is called Snoop Money, which is a free UK-based app that is available on both the Apple App Store and Google Play Store.
Snoop’s website lists some of its key features as: check personalised money-saving suggestions; track spending; review spending by category; set budgets; and keep on top of bills.
The Spreadsheet Method
For the spreadsheet method, I have created an Excel spreadsheet broken down into needs, wants, and save columns. The rows in each column then reflect either what I currently pay out on bills, maintenance, etc, and what I have budgeted for food, fuel, etc,
What I have also done is included my salary and total spend to work out what the delta is. Luckily this has left a very small amount in the landing account, which will find itself in the save column at the end of the month, all being well, to practise the zero-based budgeting method.
Once the spreadsheet is in a good place I will include a template as a downloadable Beginning Money budget planner. Stay tuned for that...
What I have Learned So Far
My “wants” are smaller than I thought. Most overspending is actually in “needs” (like rising bills)
Breaking things into pots may feel restrictive and daunting at first, but it is actually freeing — because guilt disappears when you know the money is there and where it goes
Zero-based budgeting forces me (in a positive way) to plan for future stuff I would normally forget to budget for (MOTs, Christmas, birthdays)
Reflection Prompt
I have read that budgets are not just about numbers — they are also about behaviour. Overspending can come from emotion, not logic. Awareness of the why behind your spending is as important as the what. Let’s dig into yours:
Step 1 – Look Back
Think about the last 2–3 times you overspent (online shopping spree, big night out, random takeaway). Write them down.
Step 2 – Spot the Trigger
For each one, ask yourself: What was I feeling at the time?
Stressed?
Bored?
Excited?
FOMO (fear of missing out)?
Step 3 – Find the Pattern
Circle the emotion that comes up most often. That’s your spending trigger.
Step 4 – Plan a Swap
Next time that emotion shows up, how could you respond differently? (Example: if stress drives takeaways, maybe a walk or quick gym session instead).
Stat Pack
💡 Did you know?
39% of UK adults do not budget at all (NatWest, Jul 2024)
The average UK consumer spends £58/month on subscriptions. 1 in 8 are spending over £100 a month (Whistl.co.uk, Feb 2025)
1 in 3 Brits live payday-to-payday with no financial buffer (tax research.org.uk, 2025)
Wrapping Up
Budgeting isn’t glamorous, and it is rarely perfect. But for me, this is the first step in getting off the hamster wheel of chasing.
Next time, I will look at an emergency fund — what it is, why it matters, and how to start one.
Until then,
Chris @ Beginning Money
Stay tuned for next week’s newsletter: Emergency funds - your money’s crash helmet
