Momentum Bookkeeping Services

How To Create a Personal Budget

Hold Yourself Accountable for Your Finances

Do you feel as though you’ve got holes in your pockets? Your money disappears very quickly, and you have nothing tangible to show for it, or can’t really pinpoint exactly where it all goes. Or, are you trying to save for a deposit on a house but no matter how hard you try you just don’t seem to have money left over. Having a clear budget will help you analyse your spending and adjust to suit your needs. Why is this important and what does this have to do with business bookkeeping? For the small businesses across the UK, being able to handle your own personal finances is just as important as being able to handle your business finances.  If you can keep on top of one, there is no reason why you can’t keep on top of the other.  And at Momentum Bookkeeping, we want your business to build momentum of its own.  If that means passing on tips on personal finance that will help benefit you in how you run your business – then all the better.  And should you decide that you are better off seeking help with your companies bookkeeping, we are just a phone call away.

Calculating Your Non-Negotiable Payments

When creating your personal budget, you want to start out with your income. What is the exact amount of money you receive into your account each month? Once you’ve got this number you need to identify your overheads. What are the non-negotiable bills that you must pay? This includes rent, car insurance loan payments. Add up what the total of these are and take that off your net income. What you have left here is where your able to make savings.

Identifying Costly Habits

First, it’s important to identify your costly habits. Take your bank statements and calculate what you’re spending and where. You may be surprised at what this will tell you. That £3.50 coffee you buy on your way to work every morning is costing you about £70 a month. Multiply that by twelve months a year.  That is around £840 a year on that one cup of coffee on the way to work!

You might find that you have several subscriptions that you don’t use. Its important to identify your bad money habits so you can address them and budget accordingly.

Creating Your Budget

Food shopping, socialising and miscellaneous purchases are what you have more flexibility with and therefore where you can make the most changes that will lead to savings.

Food Shopping

The easiest way to save on food is to buy ingredients instead of meals. Make the effort to cook when you can instead of ordering in. You can also look for more inexpensive options for your food shopping. Shop around see where you can get the best deals.


Socialising is something you shouldn’t have to give up to save money. However, you can make a few changes to go about doing it. Two things to consider is where and how often. Instead of going out you could have friends over, opt for free activities like going to the park, or go for a coffee instead of going out for lunch. Think about how often you are going out and how much you spend each time. The cost of transport, like taxis, quickly adds up too, so be mindful of this.

Miscellaneous Purchases

If you have a cupboard in your house filled with miscellaneous gadgets or items that are still in their box, your money could have been put to better use. Think before you buy.

Don’t get sucked in by deals and offers if it wasn’t something you were planning on buying before. Set yourself limits on how much you are willing to spend in each of these areas and try and stick to your budget. Cut down where you can and be aware of impulse buying and mindless spending.


Once you have decided how much you are willing to spend in each of these areas, deduct that number from what’s left of your income. The difference is your savings. Save right away, don’t wait till the end of the month to see what you have left. If you want to see progress in your savings, you need to be proactive about it.

It’s important to be committed and stick to your budget. Otherwise, there is little point. If you want to see progress, you have to be mindful. It’s important to know exactly where your money is going, that way you can be more in control of your personal finances.

Momentum Bookkeeping

As we said, we are giving this advice because there is a lot of overlap between handling your personal finances and handling your business finances.  Instead of socialising though, it is meeting clients for a face to face meeting.  Instead of buying the latest iPhone, is the current version you have still suitable. When you are ordering stationery for your business, are you getting the best prices. If you are renting office space, does this get taken from your set monthly income?  All of these questions need answers, just like your own personal finances do.

Build Momentum in your business with our range of Professional Bookkeeping Services

We are Momentum Bookkeeping and our goal is to make running your business easier. Whether it’s getting paid by your customers on time, completing your VAT returns or processing payroll; the demands on businesses can seem endless.

Let us handle your bookkeeping needs so that you can focus on running your business and gain some real momentum.

Image by Engin Akyurt from Pixabay