How finding cash is a piece of cake - when you know where to look

With the Great British Bake Off making a welcome return to our screens, we wanted to share this Money Advice Service family recipe to help give your dough a bit of a rise. It’s pretty quick and very easy, especially with our step-by-step guide. Ready, steady… budget!

How to make a budget

Time to prepare: 5 minutes

Time to budget: 10 to 15 minutes

If you learn how to bake a basic sponge or a simple white loaf you can build on the recipe to make all sorts of cakes, breads and other delicious goodies.

Well, a budget is the building block of money management. Once you have a decent budget in place, you can start getting your finances in shape. Don't be scared! It's really simple.

 

What you’ll need

Essential

• The Money Advice Service budget planner 
• Your bank statements

Optional

You can hopefully find most 'ingredients' in your bank statements. If not, gather what you can.

Some of the records to look for are:

• Your payslips
• Any benefit or pension payments you receive
• Your bills (eg energy, internet, phone, TV etc)
• Any annual payments (eg insurance)
• Your credit card statements

 

Method

Step 1

Find all your bank statements, ideally for the last 12 months, and records of any payments or bills that you’ve made in cash.

If you know where they are, it’s worth gathering the optional items too.

Place them on a table next to your computer.

Step 2

Open up the Money Advice Service Budget Planner tool. There are two options. If you're short on time, the "What's left over from major bills" tool will give you a rough idea. However, this recipe takes you throught the more accurate "Your detailed spending breakdown" tool.

It’ll work on your computer, mobile or tablet.

Now you’re ready!

Step 3

The first page is income. Here you enter all the money you have coming in. 

 

TOP TIP

You can use the drop downs next to each category to change how often you receive or spend the money. This means if you pay one bill monthly and another every quarter you don’t have to work out the maths yourself!

 

Step 4

Next it’s your household bills. Don’t forget the things you probably pay once a year like home insurance.

A bit trickier to know for certain is how much you spend on home maintenance. Flicking through your bank statements could help.

Step 5

Living costs are next, followed by insurance, loans and banking.

This section could be a little scary as you get a sense of how much you owe – but it’s really important.

Step 6

The final three pages are Family, Travel and Leisure.

You’ll really need to delve into your bank and credit card statements to find all these details. If it’s easier, just take an average month. But don’t forget those big - and expensive - events like Christmas, birthdays and holidays.

 

TOP TIP

With each of the income and spending pages you can add in any big one-off or regular payments in the blank “additional items” boxes at the bottom of the page.

 

Step 7

Click through from the last page to your summary. This page will give you a clear message. Are you spending more that you have coming in?

Step 8

Scroll down and you’ll be able to see where most of your money goes. This could be a handy to helping you see where to cut back – if you need to.

 

TOP TIP

Once you’ve finished, go back into the previous spending pages. Play around with some of the numbers to see what difference even small savings could make.