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How to budget better

How to budget better

A practical guide full of money saving ideas and budgeting tips

It’s important to know how to budget money

Saving doesn’t have to be a challenge and the rewards can soon add up. You might be surprised by how much you could cut costs, simply by creating a budget and sticking to it.

What’s more, having savings to rely on can be a source of comfort.

How to make a budget

Learning how to live on a budget takes time, it requires change and a little bit of commitment. You’ll need to be organised about it and find an approach that works for you. The reward is worth it.

Track your spending - see where you could cut costs

Start by reviewing all your outgoings such as monthly direct debits, standing orders, food and any other spend. This should give you a good idea of your outgoings, helping you work out what’s essential and where you could save.

Check your bank statements

If almost all your spending is on cards and via bank transfers, check your debit and credit card statements for the last 12 months.

Use money saving apps

There are lots of free (you’re saving money already) budgeting and money saving apps, designed to help you track your spending and start saving. There are apps that allow you to see all of your bank accounts and credit cards in one place.

Keep receipts and record your spending

Want to do it the traditional way? Keep hold of receipts, or write down everything you spend, and put it all in a spreadsheet. Make sure you include coffees, snacks, buses, taxis and anything else you use cash for.

Identify your essentials

Once you have the figures in front of you, it’s easier to work out where you could cut costs. Make a list of everything that’s absolutely essential and decide on a budget for a week, month and year. Consider things like:

Weekly x52 Monthly x12 Yearly
Travel Rent or mortgage Insurance
Food and drink Council tax Car tax
Childcare Utilities, TV subscriptions and internet TV licence
Fuel Loans and credit cards Home maintenance
Toiletries Mobile phone contract Dental care and haircuts
Leisure trips Contact lenses Clothes and shoes


You can then make a budget to spend as you wish on ‘non-essentials’ with your leftover income.


Top tips for saving money

1. Pay off high interest debt first

Work out which debts attract the highest interest and prioritise paying these off. For example, transferring a credit card balance could save you money on interest over time. You could also explore the most favourable mortgage rates online.

2. Consider consolidating debts

Keep an eye on interest rates and consider moving an existing loan balance to a different provider offering a better rate. Consolidating various debts into one personal loan, or a credit card offering a 0% interest period, could also cut down your monthly outgoings.

3. Use price comparison sites

Check price comparison sites or search online for savings on things like food and holidays. Shopping around could get you a better deal on TV, broadband, mobile contracts and insurance.

4. Review your utility supplier - look for offers and discounts online

There are plenty of price comparison sites dedicated to helping you to research and switch electricity and gas suppliers. Check out some of the energy price comparison calculators out there, from the likes of Which? or uSwitch.

5. Keep tabs on suppliers and offers

Review your suppliers regularly, to make sure that you’re still getting the best deal available.

6. Explore fixed tariffs and direct debit discounts

Some providers will give you a better deal if you sign up to a fixed, annual tariff, based on your typical use. Even agreeing to pay by direct debit could get you a discount.

If you’re signing up to a fixed tariff, make sure it matches your average usage. For example, you should keep track of your gas and electricity metre readings to make sure your monthly charge looks right.

7. Get a TV and broadband deal that works for you

If you’re looking for a better price for your broadband or TV package, compare ‘like for like’. Make sure you know what sort of upload and download speeds you’ll need for your household. This will depend on how many of you are typically online at any one time, and what you use the internet for. When your contract is due for renewal always try to negotiate on the price.

8. Find discount vouchers online

Get the best prices on restaurant meals, days out and online shopping through cashback and discount sites like QuidcoTopCashback and Groupon.

9. Turn clutter into cash

Clear out clutter and make some money by selling clothes and household items on eBayGumtree or Vinted. You can also trade in all sorts of things, including books, DVDs and CDs, on Amazon Marketplace.

10. Get instore discounts and rewards

Many supermarkets and stores have loyalty programmes and cards that give members discounts and rewards instore and/or online. At Sainsbury’s you can become a Nectar member, it’s free to register and you can collect bonus Nectar points on your Sainsbury's shopping.


Budgeting tips and cutting costs

How you approach your spending will have a big impact on your how much you’re able to save. Paying close attention to how you spend, buy food and plan your holidays can help.

Food money savings ideas

Knowing how to budget for food is a great start. But being mindful of how you shop for food can help you make your budget stretch even further.

  • When preparing to do a food shop, use a shopping list to note down what you plan to buy in advance and stick to this
  • Plan your meals in advance
  • Choose food with long end dates
  • Know the difference between ‘best before’ from ‘use by’ dates. ‘Best before’ is a recommendation for when to best eat the product and you can eat it after this date. Whereas if you eat past the ‘use by’ date, a product may be gone off and could be unhealthy
  • Look at the cost per unit (litre / kg), rather than the price, to find the best value
  • Visit the reduced section to find marked down perishable items
  • Check for discounts and special offers
  • Mix value brands with favourite names
  • Make your own lunches and hot drinks to take to work
  • Batch cook meals to eat later, and use up or freeze leftovers

Money savings ideas for travel

Buying travel tickets well in advance (or last minute, for holiday packages and some other types of travel) will often get you great savings. If you travel the same route regularly, it might be worth getting yourself a season ticket.

Think about walking or cycling shorter journeys and save the car for when there’s no alternative but to drive. It’s better for your health and wellbeing as well as your wallet.

When you do drive, drive smarter . There are ways to drive that can make you more fuel efficient. Avoid speeding up and slowing down suddenly – a steady speed saves more fuel. Maintain the right tyre pressure and don’t carry more weight than necessary.

Plan holidays carefully:

  • Buy flights and book hotels way in advance, or at the last minute
  • Make good use of price comparison websites like Netflights and Skyscanner to find flights, and for hotels
  • Check Airbnb to see if you could save money on a whole flat or house
  • Travel outside of peak periods like Christmas and school holidays
  • Choose value-for-money destinations, like Bulgaria, Hungary, Cyprus, Indonesia and Vietnam
  • Research the most cost-effective ways to spend overseas and how to keep your money safe abroad

Energy savings

Try not to leave appliances on standby and don’t leave chargers on constantly. Think longer-term too. Energy saving light bulbs and better insulation will help you save on bills.

Contracts and warranties

Think about what appliances you need a warranty for. Unless it’s for a washing machine, fridge freezer or other expensive item that will cost a lot to fix or replace, it’s probably not worth it. Some items might also come with longer cover than a one-year standard warranty.

Be aware of automatic renewals

Set yourself reminders for things like annual insurance and subscription renewal dates, so that contracts don’t just roll over to another year. That way, you’ll have the option to renegotiate premiums, shop around for better deals and cancel anything you no longer want.

The same applies to free trials period end dates, as you’ll often be automatically charged once the trial is over.


Watch it all add up

Once you’ve set your budgeting plan in motion, it will hopefully help towards managing your outgoings more efficiently and make some savings.

Helpful guides

Looking for more information about saving, budgeting and loans? Explore our library of guides, covering a range of related topics.

Debt consolidation loans

Considering compiling your debt into one easy payment? Find out the pros and cons of debt consolidation loans.

Guide to personal loans

Covers everything from checking your credit score to calculating interest.


Feeling confused by all the loan terminology? Our glossary will help straighten things out.

Got questions?

We’ve got the answers to a wealth of questions that customers often ask us in our FAQ section.

Our personal loans

Thinking about giving your finances a boost with a personal loan? Nectar members can borrow from £1,000 - £40,000, Non-Nectar members can borrow £1,000 - £25,000. Credit is subject to status.  T&Cs apply.