Mastering Your Finances: How to Budget and Save (Even on a Low Income)

Are you tired of struggling to make ends meet and wondering how you can save money? The key to financial freedom may be simpler than you think.

I used to cringe at the word “budgeting.” Making one seemed tricky and sticking to it felt like mission impossible.

In a world where people spend 12 years watching TV but only 11 days planning their finances, I found myself in a familiar situation—knowing every detail of my favourite TV drama series but losing control of my money.

Little did I know, the key to financial freedom was right in front of me—the budget.

Budgeting, often seen as daunting and restrictive, can actually bring you peace of mind, a sense of security, and even reduce your financial stress.

And the best part? It’s something anyone can do, regardless of income or experience.

No more feeling overwhelmed or stuck in a cycle of living paycheck to paycheck. This step-by-step guide will show you how to create a budget that you can stick to and help you become a budgeting pro.

Ready to make your money dance to your tune? Let’s dive into the world of budgeting and pave the way to a more secure and empowered financial future

In this easy-to-follow guide, you’ll learn:

  • What’s budgeting?
  • Why budgeting is important.
  • Simple steps to start creating your budget.
  • How start a budget money and save money.
  • Tips on how to stick to your budget.
  • Cool tips to level up your budgeting skills.

Excited to learn more? Keep reading!

What is Budgeting?

One of my favourite budgeting quotes is “A budget is telling your money where to go instead of wondering where it went”.

Budgeting can seem overwhelming and boring, but it’s actually the key to financial success. As women, we work hard for our money and deserve to know exactly where it’s going. That’s where budgeting comes in.

Imagine having a clear game plan for your cash, allowing you to enjoy life today while also saving for tomorrow. No more wondering where your money went – with a budget, you’re telling it exactly where to go.

But budgeting isn’t about sacrificing fun or becoming a coupon expert.

Think of it as a money compass, guiding your choices and giving you control over your finances. It’s a way to make smart decisions that align with what truly matters to you.

In fact, budgeting is a critical tool for managing money, yet many women lack confidence in this area.

According to the Financial Capability Survey, a staggering 39% of adults feel unsure about handling their finances. But the truth is, budgeting doesn’t require a financial degree. It’s all about developing good money management habits.

With a budget, you’re the boss of your money – not the other way around.

Without a plan, stress and unknowns can leave us feeling anxious. But with budgeting, you have the reins, keeping you on track towards your financial goals.

And here’s the best part: budgeting doesn’t mean giving up the things you love.

In fact, it allows guilt-free spending on the things that bring you joy. You work hard for your money, so why not use it to treat yourself without any lingering guilt?

Still not convinced? Let’s explore the numerous benefits of budgeting.

What Are the Benefits of Budgeting?

Are you wondering why you should bother with budgeting and what’s in it for you? Let’s break it down.

Budgeting is not just a tool; it’s the key to mastering money management and achieving financial wellness. Here’s why it’s crucial:

1. Stay in control of your cash:

Creating a budget is like having the remote control for your money, ensuring that you are the boss, and your money is not in control of you.

2. Get more out of your money:

Have you ever thought you had less money than you actually do? A monthly spending plan can be an eye-opener, showing you that you can do more with your money and giving yourself an instant raise.

Since I started making a monthly spending plan, I found out I can do more with my money and discovered I actually have more than I thought. It’s like giving yourself a quick raise!

3. Focus on your goals:

Budgeting isn’t just about control; it’s about keeping your eyes on the prize. It helps you prioritise spending and directs your money towards what matters most to you.

4. Save money:

The ultimate goal of budgeting is to create a savings plan. It’s the key to financial stability, allowing you to save for both current wants and future needs.

5. Spend less than you make:

Building wealth starts with spending less than you earn. A budget ensures that you’re not overspending and helps you live within your means.

6. Spend intentionally:

Budgeting is not about restriction, but about intentional spending. Prioritise your expenses, avoid unnecessary splurges, and save more for what truly matters.

7. Spend guilt-free on what you love:

Love treating yourself? A budget lets you do it without any guilty feelings.

Planning your spending in advance ensures that you allocate funds for fun activities without the financial hangover.

8. Eliminate financial worries:

Have you experienced money stress before? A budget is your shield.

It significantly improves your financial well-being, preventing unnecessary worries and creating a smoother money journey.

9. Spot potential problems:

Keep your financial radar on. Your budget helps you spot issues before they snowball, allowing you to navigate potential problems with ease.

10. Develop better money habits:

Budgeting is not just about numbers; it’s about forming good money habits.

  • Plan for expenses,
  • Carefully consider big purchases, and
  • Organise your financial life.

Staying organised can help you save big on bills, late fees, and penalties, giving you more money to play with.

So, why should you budget?

It’s your ticket to financial freedom and a stress-free financial life.

Let’s talk about the power of budgeting, backed by a study. A recent study on individual budgeting habits revealed a significant difference between those who budget and those who don’t.

Those who budget end up saving more money. It’s a simple fact: without a budget, it’s easy to overspend and struggle to save.

It’s a simple connection: no budget often means overspending.

So, how does budgeting work its magic?

Think of it as a superhero, swooping in to save the day before you swipe that credit card. It sets clear spending limits and prevents impulsive purchases that we often regret later.

But budgeting is more than just numbers on a spreadsheet – it’s a tool that can improve your financial well-being and provide security for your future.

What to Do Before You Create the Budget

But before we jump into budgeting, let’s set the stage for success with a few essential steps:

1. Define Your Financial Goals:

Start by identifying why budgeting is important to you. Are you trying to build an emergency fund, buy a car, or save for a dream vacation?

Set specific financial goals to give direction to your money. This will help you focus your spending and track your progress towards achieving your dreams.

For example, when I committed to paying off my debt, establishing that goal allowed me to concentrate my spending on what truly mattered and monitor my progress.

Take a moment to jot down your financial goals, estimate the overall costs, establish timelines, and determine the monthly savings required.

2. Commit to Consistency:

Creating a budget and sticking to it takes time and effort. Give yourself at least 3-6 months to establish a budgeting routine.

Don’t stress if you make mistakes at first – learning how to budget effectively comes with trial and error. The key is to stay consistent and adjust as needed to fit your changing circumstances.

It took me around seven months of fine-tuning before my budget started working smoothly.

3. Find the Right Budgeting Method:

Just like picking an outfit, find a budgeting method that works for your lifestyle. Be open to trying different methods and find the one that fits your unique needs.

Some popular options include:

  • the Envelope Method,
  • the 50/30/20 Method,
  • the Zero-Based Method, and
  • the Half Payment Method.

You can learn more about the different budgeting methods here. Remember, budgeting is a journey, not a one-time event, so be open to adjusting as you go.

Which is the Best Budgeting Method? 

Now, you might be wondering – which budgeting method is the best? The truth is, there is no one-size-fits-all approach.

From my experience, the best method is the one that ticks these boxes:

  • Simple to use: Keep it straightforward.
  • Accessible and convenient: Easy to reach and use.
  • Flexible and easy to maintain: Adaptable and not a hassle over time.
  • Most importantly, the one you’ll stick with: The winner is the method you won’t abandon!

Don’t be afraid to try different methods until you find the one that works for you and becomes a lasting habit.

The Four Golden Budgeting Rules


Creating a budget that sticks relies on individual goals and preferences, but there are essential rules you MUST follow for success.

  • Your income MUST not exceed expenditure. Make sure your income doesn’t play catch-up with your spending. Keep it in check, so you’re always in the financial green.
  • You MUST create a new budget at least once every single month: Refresh your budget monthly. Before the new month begins, make sure your budget is prepared for the upcoming month and ready to roll.
  • You MUST Automate Savings: One of the most effective ways to achieve your financial goals is by automating your savings. Funnel funds toward your financial goals by automating your savings. Even small amounts add up over time – set it and forget it. Your future self will thank you!
  • You MUST Budget for Fun: Don’t forget the “fun” factor. A budget isn’t about deprivation; it’s about balance. Allocate money for things that bring joy, whether it’s a night out with friends or a weekend getaway. You deserve it!

While everyone’s budgeting journey and financial may be different, these golden rules are game-changers. Stick to them, and you will see your financial goals become a reality.


When it comes to budgeting tools, simplicity is key. Whether it’s a sheet of paper, a spreadsheet, or a budgeting app, choose the method that works best for you.

With hundreds of budgeting apps available, selecting the right one might seem overwhelming, especially if you’re not tech-savvy.

Some of my top picks for budgeting apps include You Need a Budget (YNAB), Cleo, Goodbudget, and Emma.

Remember, the goal is to make budgeting a breeze. Pick a tool that clicks with you, and let’s turn those financial goals into reality!

How to Budget Money and Save Money


Think of a budget as a roadmap for your money, guiding you towards your financial goals. Key components include income, expenses, and savings (for your financial goals).

It’s a simple formula: Income – Expenses = Surplus or Deficit. Ideally, we want a positive balance.

Now, grab a budget worksheet, a tool, or an app, and let’s walk through creating your budget—a valuable tool to stay in control of your finances.

Here are ten practical steps to help you create a budget and achieve your financial goals:

Step 1: Understand the Basics

A budget includes your income, expenses, and savings. These three components work together to help you stay in control of your finances.

Step 2: Calculate Your Income

Start by noting down all your sources of income, including paychecks, child benefits, interest, bonuses, and dividends. This will give you a clear picture of how much money you have to work with.

Step 3: Prioritise Savings – Pay Yourself First

Determine a portion of your income you can save for your financial goals. Make it a habit to save right after receiving your paycheck – this is called “paying yourself first.”

Always remember, the main goal of making a budget is to save money. This way, you’ll have funds for what’s important now and build a nest egg for your future goals.

Plus, setting money aside for a goal each month can be rewarding and motivating. It’s important to make this a non-negotiable habit.

Make sure to set this money aside before paying bills or making any purchases.

If you don’t prioritize savings and treat it like a fixed expense by paying yourself first, achieving your financial goals could feel like chasing a pipe dream.

Step 4: Tackle Fixed Expenses

Identify bills that stay constant each month, such as rent, utilities, and loan payments. Be sure to also account for yearly or periodic expenses, like a TV license.

Divide the annual amount by twelve and save that amount each month. This will prevent these expenses from throwing off your budget.

For example, if your yearly TV license costs £120, you should save £12 each month for that expense.

Seasonal costs like school uniforms in August and Christmas gifts in December are also part of the financial plan.

Planning for these periodic expenses in your budget is crucial for mastering your money. These expenses can throw us off course, so be sure to include them in your monthly budget and stash away the money in a separate savings account.

Step 5: Handle Variable Expenses

Estimate your fluctuating costs, such as groceries, dining out, and entertainment.

Keep track of small expenses that can add up and tend to forget by using methods like keeping receipts, , using a small notebook, or reviewing your card statements.

Step 6: Track Your Spending

Set a goal to track your variable expenses for two to three months. This will give you a better understanding of where your money is going and help you make adjustments if needed.

You can use cash tracking, apps, or review your bank statements to stay on top of your spending.

Step 7: Plan for Miscellaneous Expenses

Set aside a small percentage (around 5%) of your income for unplanned expenses such as surprise events or birthday gifts.

As much as we try to plan our finances, life always throws unexpected costs our way. These surprise expenses can add up quickly, so it’s important to include them in your budget.

Create a budget category specifically for these unexpected expenses, typically around 2-5% of your income.

For example, if you earn £2,000 per month, allocate £40-£100 for miscellaneous costs. Being prepared is key!

Step 8: Balance Your Budget

Subtract all of your expenses (including savings) from your total income.

A positive balance shows you’re on track, while a negative balance means it’s time to adjust. Consider increasing your income or reducing expenses to reach a positive balance.

Let’s me simplify it: Here’s a financial wisdom nugget—always spend less than you make. Now, if your balance goes into the red, you’ve got three options:

  • Boost your income.
  • Trim your expenses.
  • Maybe a bit of both

Step 9: Adjust for a Negative Balance

If your expenses exceed your income, it’s time to make some changes.

Begin by cutting back on variable expenses, then move on to periodic expenses, and finally fixed expenses.

Step 10: Automate Your Finances

Set up automatic payments for bills, savings, and investments. Automating your finances helps you stick to your budget, saves time, and avoids late fees.

Remember, budgeting is a learning process. Stay flexible, track your progress, and make adjustments as needed.


So, you’ve created your budget – kudos to you! But here’s the secret to making it truly successful: regular tracking. Think of it as giving your budget a check-up.

From coaching, I’ve found that many women end up in debt because they skip an essential step – tracking their expenses.

Without a realistic budget and regular spending checks, goals can feel out of reach. That’s why monitoring expenses is vital.

It reveals where you might underestimate spending, empowering you to make necessary changes and stay on track.

Here’s a simplified guide on how to stick to your budget:

1. Keep track of your money:

Just like businesses use receipts and accounts to keep track of their finances, you can do the same.

Being organised with your money gives you the power to make smart financial decisions.

2. Know where your money goes:

Debt often sneaks in when you’re not paying attention to your spending. That’s why tracking your expenses is crucial.

It helps you see if your budget aligns with reality and where you may need to make changes.

3. Monitor your expenses:

Keep an eye on where your money is going by tracking your expenses. This step is essential because it allows you to spot areas where you may be overspending and make adjustments to stay on track with your budget.

Creating a budget is a great start, but regularly tracking your spending is what makes it a superhero tool. Think of it as your budget’s BFF.

Without them, your financial goals could seem like an unattainable fantasy.


Here’s a simple guide on how to track your expenses:


1. Set aside regular time:

Set aside regular time to check your budget. Regular reviews ensure you stay on budget.

2. Check your spending:

When you review your budget, compare what you actually spent to what you planned to spend.

Many struggle because they misjudge budget categories. When you review, compare what you spent to your initial plan. This helps you:

  • Stay on track with your financial goals.
  • Spot areas where you’re overspending or underspending.
  • Make necessary adjustments to your budget.
  • Find ways to improve your financial situation.
  • Make informed decisions about your money.

3. Adapt as needed:

Keep your spending plan flexible by adjusting it when your income, expenses, or goals change. Regularly review and adjust your budget to adapt to changing circumstances and refine your financial plan over time.

By following these steps, you’ll be better equipped to stick to your budget, manage your finances effectively and work towards your financial well-being.

How to Budget on A Low Income – Budgeting Tips

11 practical tips to help stick to your budget and achieve financial goals:

  1. Use the 5% Rule: Trim your budget painlessly by cutting variable expenses by 5%. Small adjustments in various categories can add up and it also a painless way to cut back without sacrificing too much.
  1. Plan Ahead: Take advantage of your planning skills by creating a meal plan and shopping list to stay within your grocery budget. This helps avoid impulse purchases.
  1. Understand Needs vs. Wants: Differentiate between essential needs and non-essential wants to prioritise spending and achieve financial goals faster.
  1. Exercise Self-Control: When you’ve exhausted a budget category, resist the temptation to overspend. Consider reallocating funds from underspent categories to cover any shortfalls.
  1. Limit Credit Card Usage: Credit cards can make overspending easy, leading to tighter budgets in the future. Use them sparingly and responsibly to avoid accumulating unnecessary debt.
  1. Try Budgeting Apps: Use interactive budgeting apps to track expenses in real time and send alerts when approaching spending limits. They can also provide insights into your spending habits.
  1. Give Every Pound a Purpose: Assign each pound in your budget to a specific expense or savings goal. This proactive approach ensures that your money is allocated wisely and avoids wondering where your money went.
  1. Open Separate Savings Accounts: Consider setting up separate savings accounts for emergencies or specific financial goals. Keeping these funds separate from your day-to-day spending helps prevent unnecessary spending.
  1. Adjust Your Budgeting Approach: Prioritise savings by budgeting as follows: Income – Savings = Expenses. Pay yourself first before other expenses. Then allocate the remaining funds to cover your expenses. This ensures that saving becomes a priority rather than an afterthought.
  1. Review and Adjust Regularly: Review your budget on a weekly basis and make adjustments as needed.
  1. Be Realistic: Consider all expenses, overestimate expenses, and underestimate income. when creating your budget. Building a margin of safety into your budget helps account for unexpected expenses and prevents financial stress.
  1. Build an Emergency Fund: Aim to save £1,000 as quickly as possible to handle unexpected expenses and avoid accumulating debt.

We all have a limited amount of money to spend and managing your money is crucial for financial success. When you spend wisely, you have more money to save and invest, ensuring a brighter future for you and your family.

As women, we often juggle numerous responsibilities, from managing our households to pursuing our careers. In the midst of it all, it’s crucial to prioritise our financial well-being. One way to do that is by creating a budget.

Budgeting can significantly influence your financial life. The two main benefits are clear: taking control of your money and reducing money worries. This means you become the boss of your money, deciding where it goes.

Now that you know how to create and stick to a budget, it’s time to start crafting your own spending plan.

Ready to make your money dreams a reality this year?

If you’re eager to take charge and reach your financial goals, our Financial Success Planner is the perfect kickstart!


This planner is your companion in discovering what truly matters to you in terms of money.

It guides you in setting long-term goals and breaks down those big aspirations into short term manageable monthly and weekly goals and action plan, seamlessly integrating them into your daily routine.

Click to get started today!

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