Make your budget realistic

1. Make Your Budget Realistic

Creating a budget is a great first step but it only works if it reflects your real-life spending habits. Being overly strict or unrealistic can backfire, leading to frustration and overspending. Here’s how to build a budget you’ll actually stick to:

• Be Honest with Yourself – When listing expenses, include everything — not just rent, bills, and food. Think about social events, takeaways, subscriptions (like Netflix or Spotify), birthdays, and even the odd coffee or late-night snack. These small costs add up, and pretending they don’t exist won’t help you in the long run.
• Use Your Past Spending as a Guide – Look at your bank statements or app transactions from the past few months. What are your actual spending patterns? Use that info to set realistic limits, not idealistic guesses.
• Leave Room for Flexibility – Life is unpredictable. Build a buffer into your budget (even £10–£20 a week) for surprise expenses. This will help you stay on track even when things don’t go exactly to plan.
• Don’t Cut Out Everything You Enjoy – It’s okay to budget for fun. Cutting all entertainment or social activities out of your budget might save money short-term, but it can also make you feel deprived and more likely to overspend later.
• Review and Adjust Monthly – Your first budget is a starting point, not a fixed contract. Review it each month and tweak it based on what worked and what didn’t. A realistic budget is flexible and evolves with your needs.