The short answer
- Budget the bills that do not move first: rent, power, phone, transport, debt payments. These are facts, not choices.
- Decide one savings number and move it the day money arrives, not at the end of the month. Ends of months are where savings go to die.
- Give what is left a name - 'the rest' - instead of splitting it into nine categories you will not track.
- Compare the plan to the actual once a fortnight, in ten minutes. Fortnightly catches a drift while it is still small.
Do this on your own numbers, in an hour
- Write down what arrives each month, at its lowest normal level, not its best month.
- List the bills that do not move, with their real amounts, not rounded ones.
- Subtract. What is left is the honest size of your month.
- Take your savings line off the top - even a small fixed amount - and move it on payday.
- Split the remainder into a weekly number. Weekly is easier to hold than monthly, because the horizon is short.
- Write what you will do when the number runs out early: which spend pauses first. Deciding in advance is the whole trick.
The two rules that keep it alive
First: a budget you cannot keep is not a budget, it is a wish. If the first month fails, change the numbers, not your self-respect.
Second: one number you never audit. Money for the things that make the month bearable is not waste, and dragging every coffee through a spreadsheet is how people quit.
Where this goes wrong
- Budgeting a best-case income. Commission, tips and freelance months are not fixed; plan on the floor.
- Twenty categories, full of detail, that nobody updates after week two.
- Treating an annual bill as a monthly surprise. Divide it by twelve and put it in the plan.
- Rebuilding the whole thing every month instead of adjusting two numbers.
The free tool for this
The 50 / 30 / 20 split, on your own numbers - The 50 / 30 / 20 split, on your own numbers. It runs in the page, asks for your own numbers, and sends nothing anywhere.
If you would rather not build it yourself
Money Map holds the whole method in one spreadsheet: money in, fixed bills, the savings line, the split, and a net-worth tab that updates as you go. Money Map is $14. See it on the shop, and there is a plain page about it here: what it holds.
Questions people actually ask
Cash, card, or both?
Whichever you will actually look at. The method works on paper, in a sheet, or in an envelope; what fails is a system split across three of them.
What about irregular income?
Plan on your lowest normal month and treat anything above it as a bonus you split between savings and one thing you wanted. That way the plan never breaks on a bad month.
Read next
How to work out your net worth on one page, without the jargon, How to budget when your income changes every month.