Budget Planner — Plan Your Monthly Budget
A budget is the foundation of financial control. Without one, spending happens reactively — and most people are surprised to learn where their money actually goes versus where they think it goes. The free online budget planner on PublicSoftTools helps you map income and expenses, see your monthly balance, identify problem categories, and create a savings target — with no account and no ads.
How to Use the Budget Planner
- Open the budget planner.
- Enter your monthly income (after tax). Add multiple income sources if applicable.
- Add your fixed expenses: rent/mortgage, loan payments, subscriptions, insurance — amounts that are the same every month.
- Add your variable expenses: food, transport, entertainment, clothing — amounts that change month to month. Use averages based on recent bank statements.
- Add your savings goals as a budget line (treat savings as a bill to yourself).
- The planner shows income minus all expenses — a positive number means surplus; negative means you are spending more than you earn.
- Adjust categories to reach your target balance.
Budgeting Methods Compared
| Method | Allocation | Best for | Key limitation |
|---|---|---|---|
| 50/30/20 Rule | 50% needs, 30% wants, 20% savings | Beginners; people who find detailed budgets overwhelming; moderate incomes | In high cost-of-living areas (London, etc.), 50% for needs is often insufficient; needs may take 60–70% |
| Zero-based budgeting | Every pound assigned a category; income minus all allocations = zero | People wanting full control; variable incomes; those trying to maximise savings or pay off debt | Time-intensive; requires diligent tracking to be effective |
| Pay yourself first | Transfer savings first; budget with remainder | Those who struggle to save; anyone with a regular income | Does not address spending patterns; can leave you short if savings rate is too aggressive |
| Envelope method | Physical (or virtual) envelopes for spending categories | People who overspend on discretionary categories; visual learners; those who respond to physical limits | Cash-based original method awkward in cashless society; apps (YNAB, Goodbudget) provide digital equivalent |
| Values-based budgeting | High allocation to personal priorities; cuts in lower-priority areas | People satisfied with overall finances but wanting alignment with values; higher earners | Requires self-knowledge and deliberate reflection; not suitable for those with fundamental cash-flow problems |
Monthly Budget Categories (UK)
| Category | Type | Examples | Tips |
|---|---|---|---|
| Housing | Fixed need | Rent/mortgage, council tax, buildings insurance, contents insurance, service charge | Should ideally be under 30% of gross income; in London this is often not achievable |
| Utilities | Fixed/variable need | Gas, electricity, water, broadband, mobile phone | Energy bills: compare annually (October price cap changes); broadband: compare at contract end |
| Food and groceries | Variable need | Supermarket shopping, market shopping, household supplies | Meal planning reduces food waste; own brands vs. branded often 30–50% cheaper |
| Transport | Fixed/variable need | Car loan/lease, insurance, fuel, parking, public transport, MOT/servicing | Car total cost often underestimated. London: Oyster/contactless is usually cheaper than zone card if irregular commuter |
| Healthcare | Variable need | NHS prescriptions (£9.90 per item in 2026), dental, optician, private health insurance | Prepayment certificate (PPC) saves money if you pay for 12+ prescriptions per year |
| Insurance | Fixed need | Life insurance, income protection, car insurance, pet insurance, travel insurance | Compare annually; loyalty penalty means switching often saves significantly |
| Savings and investments | Savings | Emergency fund, ISA contributions, pension top-ups, investment account | ISA allowance: £20,000/year (2026). LISA for first home buyers: 25% government bonus. Pension: employer match is free money. |
| Subscriptions | Want | Streaming (Netflix, Spotify, Disney+), gym, software subscriptions, magazines | Subscription creep: list all subscriptions quarterly; cancel anything unused for 2+ months |
| Dining and socialising | Want | Restaurants, takeaways, coffee, pubs, bars, cinema, events | High-discretionary category; easiest to cut when tightening. Meal planning reduces takeaway frequency. |
| Clothing and personal care | Mixed | Clothing, shoes, haircuts, cosmetics, toiletries | Cost per wear analysis helps justify quality purchases; charity shops for casual clothes |
Building an Emergency Fund
An emergency fund — 3–6 months of essential expenses held in an accessible savings account — is the financial foundation before investing or aggressively paying off debt (excluding very high-interest debt):
- Why 3–6 months? Covers job loss (average UK job search: 2–4 months), major unexpected repairs (boiler: £1,500–£3,000; car: £500–£2,000), medical or family emergencies.
- Where to hold it: Easy-access savings account with competitive interest rate (not a current account paying 0%). NS&I Premium Bonds, Marcus, Chase, or similar — check current best-buy rates.
- How to build it: Set a monthly transfer (even £50 or £100) and treat it as a fixed expense. 3 months of £200/month builds a £600 starter fund; over 24 months builds £4,800.
- First £1,000 is the critical milestone: Most financial shocks that derail budgets are under £1,000. A £1,000 emergency fund eliminates the most common budget-busting events.
UK Tax and Savings Allowances (2026)
Budget planning should account for available tax advantages:
- ISA allowance: £20,000/year per adult. Interest, dividends, and capital gains in an ISA are tax-free. Use a Cash ISA for emergency fund/short-term goals; Stocks and Shares ISA for long-term (5+ year) investing.
- Lifetime ISA (LISA): £4,000/year (within the £20,000 ISA allowance); government adds 25% bonus (up to £1,000/year). For first home purchase or retirement (minimum age 60). Penalty for other withdrawals.
- Personal Savings Allowance: Basic rate taxpayers can earn £1,000 in savings interest tax-free; higher rate taxpayers £500. Additional rate: none. Beyond this, savings interest counts as income.
- Pension contributions: 100% of earnings (up to £60,000 annual allowance) can be contributed with tax relief. Employer match is effectively free money — contribute at least enough to get full employer match before any other investing.
- Capital Gains Tax annual exemption: £3,000 (2026/27) — gains below this are tax-free when selling investments outside an ISA.
Common Questions
I earn a decent salary but never have money at the end of the month — where is it going?
This is the most common budget question and the answer is almost always the same: lifestyle inflation, subscription creep, and underestimating variable expenses. Track every transaction for one month (your bank app often categorises this). People are typically surprised by: food delivery spending, subscriptions they forgot they had, socialising costs that are 2–3× what they estimated, and small daily purchases (coffee, snacks) that add up. A budget planner with real numbers from your bank statement rather than estimates reveals where spending actually goes.
How much should I save each month?
The 20% rule (50/30/20) is a starting framework. In practice: (1) First, build a £1,000 emergency buffer. (2) Next, contribute enough to pension to get full employer match. (3) Then pay off high-interest debt (credit cards above 5%). (4) Build full 3–6 month emergency fund. (5) Then invest additional savings in ISA/pension. The order matters — getting employer pension match before paying off a 2% car loan gives you a guaranteed 3–4% return (the match) before addressing the 2% cost.
What is the difference between a budget and a spending tracker?
A budget is a plan — you decide in advance how much to allocate to each category. A spending tracker records what you actually spent after the fact. Both are valuable but serve different purposes. A budget without tracking is wishful thinking; tracking without a budget gives you data but no target to compare against. The most effective approach: create a budget at the start of each month, track spending throughout, and review actuals vs. budget at month end. The gap between planned and actual spending is where the insight is.
Plan Your Budget
Add your income and expenses to see your monthly balance. Identify where to save and set goals. Free, no signup, no data stored.
Open Budget Planner