How to budget on a UK salary

1. Start with your take-home pay, not your salary

The salary in your job offer is before deductions. What lands in your bank account is lower, because Income Tax and National Insurance come off first, and often a workplace pension and student loan repayments too.

Look at the net pay line on your payslip. That is the number to budget with. If your pay changes month to month, use the lowest of your last three months so you don't plan with money you might not get.

2. List the bills you can't avoid

Write down everything that leaves your account every month whatever happens. For most people in the UK that means:

• Rent or mortgage
• Council Tax
• Gas, electricity and water
• Phone, broadband and the TV Licence if you need one
• Travel to work, insurance and any loan or card repayments

Your bank app's last two or three statements are the quickest way to find these. Bills paid yearly, such as car insurance, can be divided by 12 so they are set aside each month.

3. Give the rest a job

Take your bills away from your take-home pay. What is left covers food, everyday spending and saving. Split it into a few simple categories, such as Food, Transport, Shopping, Going out and Savings, and give each one a monthly limit.

If you are not sure where to start, the 50/30/20 rule is a popular rough guide: about half on needs, under a third on wants and a fifth on savings.

4. Pay your savings first

Move your savings amount on payday, before you start spending. Even a small regular amount adds up, and it is the easiest way to build an emergency fund.

5. Track it for one month, then adjust

Your first budget will not be perfect. Note what you spend for a month and compare it with your limits. If Food keeps going over, either raise the limit and lower another one, or look for ways to spend less. The aim is a plan you can actually stick to.

BudgetHive does this for you: type in what you spend and it shows how much of each budget is left, and warns you when you go over.