Budgeting is often restrictive and complicated, but it doesn’t have to be! Making a weekly budget can offer you the freedom to spend on what matters most while controlling your savings and spending. With a well-designed weekly budget, you can easily manage your finances, reduce unnecessary stress, and even allocate funds for your wants, not just your needs.
In this post, you will learn how to make a weekly budget that works for your lifestyle. By following this easy step-by-step guide, you’ll soon be in control of your money rather than your money controlling you.
How to Make a Weekly Budget: Why You Should Budget Weekly
A weekly budget allows you to monitor your expenses closely without feeling overwhelmed by longer-term plans, such as a monthly or yearly budget.
If you get paid weekly or bi-weekly, this method makes it easier to plan, track, and adjust your finances based on shorter time frames.
The best part?
Your weekly budget doesn’t have to be restrictive. You can build a budget that reflects your needs, goals, and preferences, including your favourite leisure activities.
How to Make a Weekly Budget: Step-by-step Guide
Step 1: Understand Your Income
The first and most crucial step in creating a weekly budget is to know how much money you bring in. This is your take-home pay—what hits your bank account after taxes, National Insurance, pension contributions and other deductions. Here’s how to do it:
- If you’re paid weekly, note your weekly wage amount.
- If you’re paid bi-weekly or monthly, calculate your weekly income by dividing your total wage by the number of weeks (e.g., if you get paid bi-weekly, divide by 2; if monthly, divide by 4).
Remember to include any additional sources of income, such as side gigs, freelance work, or other financial contributions you regularly receive.
Helpful Tip:
If your income fluctuates, take an average of the last three months to get a reliable estimate.
Step 2: List All Your Expenses
Once you know your income, you can break down all your expenses. This includes fixed, changeable and variable expenses. Fixed expenses don’t change often; changeable expenses you can change, but it may take a bit of time, while variable costs can fluctuate weakly. Here’s a breakdown:
Fixed Expenses:
- Rent or mortgage payments
- Utilities (average these if they vary monthly)
- Council tax (in the UK)
- Loan repayments
Changeable Expenses:
- Insurance
- Telephony
- Internet
Variable Expenses:
- Groceries
- Transportation (gas, public transit, etc.)
- Dining out
- Entertainment
- Clothing
- Personal care items
- Services
Don’t forget to account for irregular (and unexpected) expenses like birthdays, holidays, or repairs.
To make these more manageable, estimate how much you spend on them in a year and divide by 52 to add them to your weekly budget.
Step 2.1: Categorise Your Expenses
Grouping your expenses into categories makes understanding where your money goes easier. Some common categories include:
- Housing: Rent/mortgage, utilities
- Transportation: Gas, public transportation, car maintenance
- Groceries: Food and household supplies
- Entertainment: Movies, dining out, subscriptions
- Savings and Investments: Emergency funds, retirement, investments
- Personal: Clothing, grooming, medical
Having categories helps you quickly spot areas where you may be overspending or where you can reallocate money.
Step 3: Set Financial Goals
A weekly budget isn’t just about limiting your spending; it’s also about helping you achieve your financial goals. Before allocating money, define what your goals are. These could be:
- Paying off debt
- Building an emergency fund
- Saving for a vacation
- Contributing to retirement or investment accounts
By clearly defining your goals, you can ensure your weekly budget reflects what’s important to you and dovetails with your long-term financial management.
This will make prioritising where your money should go each week more manageable.
Step 4: Assign Spending Limits to Each Category
Now that you’ve categorised your expenses and established your goals, it’s time to assign spending limits to each category. The goal is to balance your income with your expenses while leaving room for savings and discretionary spending.
50/30/20 Rule
A popular budgeting rule to follow is the 50/30/20 rule:
- 50% for needs: This includes essential expenses like rent, utilities, groceries, and transportation.
- 30% for wants: This is where your discretionary spending comes in—dining out, entertainment, shopping, etc.
- 20% for savings and debt repayment: This includes contributions to savings accounts, investments, or extra payments on loans and debt.
Example:
- Income: £500 weekly
- Needs (50%): £250 for rent, utilities, groceries, transportation
- Wants (30%): £150 for dining out, entertainment, shopping
- Savings (20%): £100 for emergency savings, retirement, or debt payments
You can adjust these percentages based on your financial situation. For example, if you have a lot of debt, you should allocate 20% to debt repayment and 10% to wants.
This breakdown helps you stay on track without feeling deprived. It allows you to enjoy some discretionary spending while focusing on saving and achieving your goals.
Step 5: Track Your Spending
Even the best-planned budget is meaningless if you don’t track your spending. Monitoring your expenses ensures you stay within your budget and spot areas where you may be overspending.
Here are some ways to track your spending:
Use Budgeting Apps:
Apps like YNAB (You Need a Budget), Monzo, or Money Dashboard can sync with your bank accounts and automatically categorise your spending. These tools make tracking effortless and provide real-time insights.
Use a Spreadsheet:
Those who prefer a hands-on approach can create a simple spreadsheet to track spending effectively.
Record your transactions daily or weekly and categorise them accordingly.
Keep Receipts:
If you’re more tactile, holding onto receipts and manually logging them is another method. This can work well if you like physically tracking your spending.
Step 6: Adjust and Optimise
After tracking your spending for several weeks, you may find that some categories need adjusting. This is normal, and being flexible is part of creating a sustainable budget.
If you consistently overspend in one category, try reallocating funds from another. For example, if you spend more on dining out than you had planned, you might cut back on entertainment to make up the difference.
Review your budget periodically to ensure it aligns with your current financial situation and goals.
Your budget should change as your life changes—whether through job promotions, moving, or new financial goals—too.
Step 7: Build an Emergency Fund
Building an emergency fund is an essential part of any good budget. Life can be unpredictable, and having a cushion can prevent you from going into debt when the unexpected happens.
Start by setting aside a small amount each week—£10 or £20 can add up quickly. Aim to build an emergency fund that covers 3 to 6 months’ worth of living expenses. This will give you peace of mind and added financial security.
Step 8: Celebrate Wins and Stay Motivated
Budgeting doesn’t have to be all about sacrifice.
Remember to celebrate small wins along the way! Reward yourself if you stick to your weekly budget or hit a financial goal. It could be something as simple as a small treat or planning a fun outing.
The key to staying motivated is not feeling like you’re depriving yourself. A budget that works will allow you to enjoy life while working toward financial stability.
How to Make a Weekly Budget: Common Budgeting Mistakes to Avoid
When learning how to make a weekly budget, it’s essential to avoid some common pitfalls that could derail your success:
- Underestimating variable expenses: Expenses like dining out, groceries, and entertainment can fluctuate. Be realistic in your estimates.
- Not accounting for irregular expenses: Seasonal costs like holidays, car repairs, or gifts can throw off your budget if not planned for.
- Not being flexible: Life changes, and so should your budget. Don’t be afraid to adjust when necessary.
- Ignoring debt repayment: Don’t forget to allocate a portion of your budget toward paying off high-interest debt.
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Making a weekly budget is a powerful way to take control of your finances without feeling restricted.
By following this simple step-by-step guide, you can build a budget that meets your needs and allows you to pursue your wants and goals.
With consistent tracking, a little flexibility, and a focus on your financial priorities, your budget will soon feel like a tool that empowers you rather than restricts you.
So why not start now? Your financial freedom is just a budget away!
Photo by Kelly Sikkema on Unsplash