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Budgeting

Taking control of your day-to-day

Creating a budget helps you take control of your day-to-day finances and understand what’s coming in, what’s going out and where it's going – so you can prioritise spending and saving.

If you make a plan and stick to it, it can help you to make your money last and potentially save each month. A great way to start is to detail your spending and income. Thankfully, this can be found in one place: your bank statements.

Download your free budget planner

Our simple budget planner can give you an overview of how and where you’re spending your money each month.

Discover the 50/15/5 rule - in 60 seconds

See how you can use this helpful rule-of-thumb to find the right balance between spending and saving.

Are you feeling good about the state of your finances?

We found that only 52% of people we asked feel the current state of their finances are good. *The Fidelity Global Sentiment Survey, 2021.

1. Look at your income & expenses

Take a look at your last three bank statements — they should give you a good idea of your income and spending, and where you might be able to make savings. 

It can be helpful to separate:

  • Essentials – things like bills, food, rent or mortgage payments
  • Non-essentials – those extra items like eating out, shopping and subscriptions

Your budget should tell you if you’re spending more, or less, than your income each month.

2. Make a plan & set goals

If your spending is lower than your income — well done! If that’s you, you can focus on saving and putting that money to good use towards your goals. 

But if you’re spending more than your income each month, it is a sign that you need to make changes right away. You may be managing month-to-month by dipping into savings, or worse using overdraft or credit card borrowing which can mean extra interest costs in the future.

3. Regularly review your budget

Now you’ve built your budget and have set yourself goals, you should regularly check that you’re keeping to your plan. This way you can make sure that you're on track to achieve your goals.

Remember, you can make changes where it’s not working or where you feel you can potentially save more.

The 50/15/5 rule

As a starting point for your budget you can use our helpful rule-of-thumb to find the right balance between saving and spending.

50% on essentials
15% on retirement savings
5% on short term savings
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Build an emergency fund

Your budget should cover contingency savings set aside for any unexpected events, for example a car breakdown or a leaky roof. Start by aiming to save the equivalent of one month’s income. Eventually saving ideally three to six month's income to prepare you and your family for the unexpected.

A quick summary on budgeting
 

  • Look at your income and outgoings and make a plan, keeping our 50/15/5 rule in mind
  • Be prepared for the unexpected, build up an emergency fund
  • Review your budget regularly, especially when life events happen.

Learn more about financial wellness

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Debt

From understanding to knowing when and how to seek help.

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Savings

For life goals – now (e.g. a holiday) and for the future (e.g. retirement).

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Protection

For unexpected events – the importance of planning & being prepared.

*The Fidelity Global Sentiment Survey, 2021.

The sample consisted of respondents with the following qualifying conditions: aged 20-75; either they or their partner were employed full-time or part-time; a minimum household income of: Australia: A$45,000 annually; China: RMB 5,000 monthly; Hong Kong: HK$15,000 monthly; USA: US$20,000 annually; Canada: CA$30,000 annually; UK: £10,000 annually; Mexico: $4,500 MXN monthly; Ireland: €20,000 annually; Germany: €20,000 annually; Netherlands: €20,000 annually; France: €20,000 annually; Italy: €15,000 annually; Spain: €15,000 annually; Japan: 3m yen annually; Brazil: R$1,501 monthly; India: ₹55,001 annually. The data collection, research and analysis for the above markets was completed in partnership with Opinium, a strategic insight agency. Data collection took place between July 2021 and August 2021. Reporting and analysis took place between August 2021 and October 2021.