January: 

January always hits differently. The decorations are down, the credit card statement is up, and after the long, wallet-stretching wait for payday post-Christmas, many of us are asking the same question: where did December’s money actually go?

January is an opportune moment to reset. Not in a joy-killing, spreadsheet-obsessed way (well, maybe kind-of) but mainly in a clear‑headed, forward‑looking one. This is the month to take stock, rebuild confidence, and put a simple budgeting plan in place that works in real life, not just on paper.

Start With Your “Why”

• Before starting on the numbers, decide why you’re budgeting. Is it to reduce stress, build savings, clear debt, or plan for something specific? Without a goal in mind, this is just meaningless admin.
• Work out your net monthly income, be this salary, self-employed drawings, dividends. If income varies, use a conservative monthly average.
• List out your fixed expenses; mortgage/rent, utilities, insurances, subscriptions.
• Identify your variable spending; food, transport, eating out and socialising, clothes, hobbies. Checking bank statements over the last 3 months+ makes this more accurate. Be realistic here – it is easy to understate, which only leads to dipping into savings and resenting yourself for doing so.
• Don’t forget annual and irregular costs. This is where many budgets fail. Include car servicing and MOT, birthdays and Christmas, holidays, home maintenance, professional fees. Break these down into monthly amounts so they’re planned for
• Hopefully there is still some money left over! Decide what you want this money to do and allocate it intentionally: e.g. debt repayment, short-term savings, topping up investments or pensions.
• Make it automatic where possible and pay YOURSELF first
  

A Tool That Helps Us: Monzo 

This is not an endorsement – other banking providers are available. That said, my wife and I use Monzo to manage our day-to-day finances, and it works well for us because it makes budgeting visible and hard to ignore.

It does take a little time to set up, but the ability to use different “pots” and segregated savings accounts is extremely helpful. Once your salary lands, there’s a simple one-click salary sorter that automatically allocates money into each pot. Ours is structured as follows:

• Direct debit pot – ring-fenced so all bills and direct debit investment contributions collect from here and never interfere with day-to-day spending
• Holiday savings pot – contributed to monthly
• Short-term personal savings – we give ourselves the same amount
• Short-term joint savings
• Emergency fund – not contributed to monthly, but topped back up from short-term savings if ever needed

What’s left becomes our free float across joint and personal current accounts for household spending and discretionary purchases.

We use this free float to pay off our Amex as we go. If you’re disciplined and confident that using a credit card won’t lead to overspending, this can be a good way to make your spending work harder through rewards and protections. If not, stick to a debit card – the best system is always the one you’ll actually follow.

If you need a little help, attached is the spreadsheet we use to manage our own finances.