Chestnut Financial Services Limited

10 Newark Road, Bassingham, LN5 9HA

Call Us: 01522 788887

Email Us:

Chestnut Financial Services Limited

10 Newark Road, Bassingham, LN5 9HA

Call Us: 01522 788887

Email Us:


Financial Services Limited

10 Newark Road,



Call Us: 01522 788887

Email Us:

Financial Budget

- Step 1 of Financial Planning

Spend Less Than You Earn

The first step is easy to say, but not so easy to do.

Spending less than we earn is a discipline. In order to do it, we have to be intentional about what we spend our money on, or more truthfully, what we don’t spend it on.

There are plenty of shiny things vying for their share of our wallet, and plenty of human necessities too. Life is for living, don’t get me wrong. I do like to enjoy things, but when we need to get into debt to enjoy those things we have a problem.

A financial budget isn’t fun necessarily, but neither does it have to be tedious or terrifying.

Financial Budget - Farley!
Financial Budget - Farley!

What Are the Steps of a Financial Budget?

Essentially it comes down to starting each month or each week by deciding where each pound is going to be spent that month and tracking progress to make sure reality matches the intention.

For years I thought my financial budget was planning for the future, when in fact all I was doing was tracking where my money had gone (past tense). I could tell you to the penny what we had spent on fuel or food, but we never set out with a plan for what those figures should be.

Financial budgeting should be forward-looking.

So now I sit down at the top of the month and plan the month ahead:

The regular bills are allowed for first, the one's usually paid by direct debit etc. This makes things tidy and easy to manage. There’s no sense in budgeting a value which is the same each month, like an electricity direct debit payment or house insurance.

Then we think about the variable items:

  • What birthdays or other celebrations (anniversaries and Christmas) are coming up and how much will we spend?
  • Do we have any nights out or holidays planned? If so, what will they cost?
  • What about jobs that need doing round the house (do we have to buy paint, sandpaper or door handles)?
  • What about food and fuel?

Annual bills are budgeted for monthly (divide those costs by 12).

As we go through the month, we see how we’re doing against the plan. If something unexpected has happened, like some maintenance on the car, then we may have to adjust the budget.

We try to stick to a ‘sleep on it’ rule, rather than blowing the budget on an impulse buy.

Before we allow for bills, and before we allow for our monthly variable expenditure, we put in an amount we would like to save. It doesn’t always happen. Sometimes those unexpected things mean we can’t save in one given month, but again, it is all about being intentional. If you have debt (other than a mortgage which is a bill, rather than a debt) then this should be the first priority.

Financial Budget - Conker
Financial Budget - Conker

Some Ideas - Your Financial Budget is a Financial Bucket!

Financial budgeting, then, can be distilled to these steps:

• Plan the month in advance

• Pay yourself first (mortgage and other debt repayments then savings and pension contributions)

• Pay standing orders and direct debits next

• Budget what is left, to the last penny

• Keep track of your actual spending throughout the month

You will never, ever be rich if you spend more than is coming in every month. But if you can master financial budgeting, this most basic of financial planning skills, the future is bright indeed.

So our starting point is to look at your financial bucket - being clear what is inside and outside the bucket, what will happen to it over your lifetime, especially when we think about what is  in the bucket at a given time when you want to do something.

We know things cost money, so we always think about the "cost taps":

  • Now tap - Cost of current lifestyle
  • Active retirement tap (the cost of a good living in retirement – that’s the plan!), and the
  • Late retirement tap (the stage in life when your needs change – you become too old to do the sort of things you used to – looking for peace of mind that longer term health and long term nursing home & care needs can be met
  • Plus the one offs!

Looking at expenditure requirements is not as daunting as it sounds. Getting a fix on what is spent can be enlightening, powerful, and put you in control of your financial future. Not knowing how much you spend is what always causes problems. Remember we are talking about you getting and keeping the life you want!

Be realistic and honest with yourself. You’ll be glad you did.

Contact Us - Emma Francis

Please Get In Touch

Contact Us - Emma Francis

You can telephone our office on 01522 788887, we always look forward to speaking with our clients.

Alternatively, you can email us. Our address is

You can telephone our office on 01522 788887, we always look forward to speaking with our clients.

Alternatively, you can email us. Our address is

Or please complete this contact form and we will get back to you as soon as possible!

Please enter your name.
Please enter a message.
Logos for Chestnut Financial Services

Chestnut Financial Services Limited is authorised and regulated by the Financial Conduct Authority, and is entered on the Register under reference 840940.

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Chestnut Financial Services Limited; registered in England and Wales no 9918363, registered office 10 Newark Road, Bassingham, LN5 9HA. VAT Registration Number is 304 9810 11