Budgeting Basics – Taking Control of Your Finances

Introduction

In today’s world, where the cost of living continues to rise and unexpected expenses can appear without warning, creating a practical, flexible budget is one of the most empowering steps you can take toward financial stability. Budgeting isn't about restricting your life or living with less—it’s about making your money work for you, providing peace of mind, and building a foundation for future goals. Whether you're just starting out, supporting a family, or looking to stretch your income a bit further, this guide will help you understand the basics of budgeting and how to apply them effectively.

Why Budgeting Matters

A well-structured budget gives you control. It enables you to:

• See where your money is going
• Make room for savings
• Prepare for emergencies
• Reduce financial stress
• Avoid unnecessary debt

By tracking income and expenses, you gain insights into your spending habits and can make better-informed decisions.

Step-by-Step Guide to Building Your Budget

Step 1: Know Your Income - Your budget starts with your income. Calculate your total monthly income after tax. This includes:

• Salary or wages
• Benefits (Universal Credit, Child Benefit, etc.)
• Pensions
• Any side income (freelance work, part-time jobs)

Step 2: Track Your Spending - Spend a month tracking every penny that goes out. Use apps (https://www.forbes.com/uk/advisor/banking/best-budgeting-apps/), a notebook, or spreadsheets to monitor spending in categories like:

• Rent or mortgage
• Utilities (gas, electricity, water)
• Food and groceries
• Transport (fuel, public transport, car insurance)
• Subscriptions and memberships
• Entertainment and dining

Being honest and detailed here is key. Many people are surprised at how much they spend on things like takeaways or unused subscriptions.

Step 3: Categorise and Prioritise - Split your expenses into three categories:

• Essential expenses: Things you can’t live without (rent, utilities, food)
• Non-essential expenses: Extras (eating out, Netflix, shopping)
• Savings and debt repayments: Set aside money for emergencies, goals, and to pay off debt

Aim to follow the 50/30/20 rule if possible:

• 50% of income on needs
• 30% on wants
• 20% on savings and debt repayment

Adjust the percentages to suit your situation, especially during tighter months such as the leadup to Christmas.

Step 4: Set Financial Goals - Clear goals make budgeting easier and more motivating. These might include:

• Paying off a credit card
• Saving for a holiday or Christmas
• Building an emergency fund
• Buying a car or first home

Set short-, medium-, and long-term goals. Track your progress to stay inspired.

Step 5: Build and Adjust Your Budget - Now bring it all together in a monthly budget plan. Use tools like MoneyHelper’s budget planner or budgeting apps like Emma, YNAB (You Need A Budget), or Plum.

Be flexible. Life changes, and so should your budget. Reassess regularly, especially after big life events (new job, having a baby, moving house).

Tips to Make Budgeting Easier

1. Automate Your Savings: If you work for one of our Moneyworks Payroll Partners, you can save directly from your salary, meaning the savings go out before you even notice it’s gone! Alternatively, set up a standing order to move money to savings as soon as you're paid. Treat it like a bill you pay yourself.
2. Use Pots/Saving Spaces for Discretionary Spending: if your bank allows, as soon as you get paid separate your funds into categories like food, transport, or entertainment, and keep it in labelled spaces. When it’s gone, it’s gone!
3. Review Subscriptions: Do you really use that gym membership or streaming service? Cancel anything you haven’t used at least once a week in the last month, simple as that!
4. Meal Plan: Planning meals helps reduce waste and cuts your shopping bill. Stick to a shopping list and avoid buying on impulse. If you are struggling for meal ideas, there are tonnes of social media pages on Facebook/Instagram, YouTube and TikTok who specialise in showing you how to make cheap, cheerful, family-filling meals.
5. Shop Smarter: Buy own-brand items, take advantage of deals, and avoid shopping when hungry.
6. Use Community Resources: Check out community fridges, local food banks and baby banks.

Common Budgeting Challenges (And How to Overcome Them)

• "I don’t earn enough to save." Even saving a few pounds a month can make a difference over time. Start small, build up when you can.
• "Unexpected costs ruin my plan." Build a buffer for surprise expenses, like car repairs or vet bills.
• "It’s too time-consuming." Budgeting gets faster with practice. After a few months, it will take just minutes.

How Cambrian Credit Union Can Help

At Cambrian, we believe everyone deserves a fair chance to build a secure financial future. We’re not-for-profit and community-focused, which means our support is tailored to real people—not shareholders. Here’s how we can help:

• Savings Accounts: Start saving with as little as £5 for Adults, or £1 for Juniors. We’ll help you develop good habits that last a lifetime.
• Moneyworks Payroll Deduction: As we mentioned above, saving is easier when you don’t notice the money leaving your account, that’s why with a Moneyworks Payroll deduction, you can make saving money simple.
• Starter Loans: Designed to help with small, manageable borrowing. Perfect if you're starting out or rebuilding.
• Financial Wellbeing Advice: We’re here to signpost you to services that may be able to help you, such as Citizens Advice or MoneyHelper.
• Mobile App: Track savings, loan balances, and make payments on the go.

Useful Resources

• MoneyHelper Budget Planner
• Citizen’s Advice Budgeting Tips
• Turn2Us Benefits Calculator

Final Thoughts

Taking control of your finances through budgeting is one of the most powerful decisions you can make. It might feel overwhelming at first, but remember: budgeting is not about perfection. It's about progress.

Whether you're saving for something special, trying to reduce debt, or just want more peace of mind at the end of the month, starting a budget today can set you on the path to a brighter financial future.

And remember—you’re not alone. Cambrian Credit Union is here to support you every step of the way.