How to make a simple monthly budget

A budget doesn't have to be a hundred-row spreadsheet. What works for most people is knowing what comes in, setting the fixed costs aside, and putting a limit on the few categories where money tends to slip away.

1. See what you spend today

Before setting limits, look at one or two months of real spending. The quickest way is to import your bank statement as OFX and look at the totals per category.

→ How to export your statement as OFX

2. Split fixed from variable

Fixed costs (rent, bills, subscriptions, instalments) barely change month to month. Variable ones (groceries, eating out, transport, fun) are where a budget makes a difference.

3. Start from a rule of thumb

A well-known reference is the 50/30/20 rule: about 50% of income for needs, 30% for wants and 20% for saving or paying off debt. It isn't a law; it shows whether your split is far off.

4. Set limits only where it matters

1. Pick three to five variable categories, such as groceries, takeaway and entertainment.
2. Give each a limit a little below what you spent last month.
3. Review at the end of the month: raise what was unrealistic, cut where money was left over.

5. Follow it during the month

A budget only works if you know you're close to a limit before you pass it. In Coinky you set a monthly limit per category, see how much of each you've used, and get a reminder when you're close to or over a limit.

More guides

• How to export your bank statement as an OFX file

  What an OFX file is, where banks usually hide the export option, and how to import your statement into Coinky without typing anything.

• Credit card closing date vs due date: avoid bill surprises

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• A finance app without a bank login: why it protects your data

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