Setting up a budget

• What a budget is
   
• What tools you can use to set up your budget

Budgeting is the process of creating a plan to spend your money. Your budget usually operates on a monthly basis and details all the income and expenses in your current financial situation.

Remember the 50-30-20 rule? Here are some examples of what should go into your budget:

• When starting a budget for the first time, you should get into the habit of reviewing it pretty regularly, e.g. monthly.
   
• Keep track of your budget with a budgeting app, in your e-banking account or in a spreadsheet.
   
• Once you get into the habit of budgeting, it makes sense to do a larger review every three months or at least once a year.

We’ve looked at lots of free budgeting apps and online tools, and here are some that we think are worth your time:

• Mint: this app syncs with your accounts, including credit cards, to show how all your money flows in easy-to-read charts.
   
• Money Dashboard: you can categorise your spending and see goals of your figures for the past six months.
   
• Bean: this app flags up better deals for the stuff you buy, from pet insurance to interest rates - it can even help you to identify unused subscriptions that could be cancelled.
   
• Emma: once you sync your accounts and set a savings target, this app will let you know if you’re spending too much or if a purchase is going to push you over your limit.
   
• Cleo: as an AI chatbot, Cleo can instantly answer natural language questions - simply ask ‘can I afford this’, and you’ll get an answer including easy-to-understand charts.

If you prefer a good old excel spreadsheet, find our budgeting calculator next.

1. Pick a budgeting tool (app, card, spreadsheet).
    
2. Set up your budget.
    
3. Decide how frequently you want to re-visit your budget and either create auto-alarms or calendar reminders to make the necessary time.