Budgeting can feel like a chore. We’ve all drawn up an ambitious budget only to abandon it weeks later. If that sounds familiar, you’re not alone. In fact, nearly half of UK households admit to having no savings or less than £1,500 set aside for emergencies​. But a solid budget is the foundation of good financial health and helps with everything from saving for big goals to eventually investing for your future. So, guess what? We’ve put this guide together with top tips on how to create a budget that’ll stick so you can do the things you really want with your money.

The budgeting struggle (and why it’s worth it)

Most of us aren't great at budgeting, and it’s understandable with even the price of coffee costing way more than it probably should. A lot of people don’t have a formal budget, and it’s easy to see why. Almost 56% of adults said their cost of living had increased compared to the previous month. And of those who do try to budget, 43% admit they sometimes go way past their monthly limits.

Such widespread struggle shows in our finances. Nearly 40% of UK adults don't feel confident managing money, and millions have less than £100 saved. With today's rising living costs, putting money aside feels almost impossible.

So why bother? Because a good budget gives you control when life throws financial curveballs. It helps you avoid being part of that alarming statistic of nearly half of people with no emergency fund at all. Most importantly, budgeting breaks the paycheck-to-paycheck cycle that keeps so many people financially stressed and unable to build wealth.

Crafting a budget you can stick to

Creating a sustainable budget doesn’t have to be complicated. Like any progress, you need to take small, consistent actions that add up over time. Start by breaking it down into these manageable steps.

1) Assess your income and spending

Start by figuring out how much money is coming in each month(after taxes), and where it’s currently going. Look at bank statements and track expenses for a month. You might be surprised how those morning coffees or impulse Amazon buys add up and up and up. Knowing your exact income and expense totals will highlight areas where you can consider cutting back and how much you can realistically save.

2) Set clear financial goals

Give yourself a reason to budget. Are you saving for a house deposit? Perhaps you want to pay off debt? Or maybe the plan is to build an emergency fund. Whatever your reason, set specific goals (e.g. “save £5,000 in a year for a deposit”) with a timeframe to reach them and use a budgeting app like Kaldi to work out your monthly target to reach it. Having targets makes budgeting more motivating and helps you prioritise. Be sure to include short-term, fun goals too, like a holiday or new gadget. This way, you have rewards to look forward to and budgeting is as much about the things that matter to you as it is restrictions.

3) Design your budget (allocate your money)

Choose a budgeting method that fits your style. Some popular frameworks include the 50/30/20 rule (50% needs, 30% wants, 20% savings or debt) or a more detailed category budget.

Allocate realistic amounts to essentials like housing, utilities, food and transport, then decide how much to set aside for saving and investing (pay yourself first!).

Don’t forget to budget some “fun money” for dining out, hobbies or treats.

Pro tip: If you allocate even a small amount for non-essentials, you’re less likely to feel deprived and blow the budget later. The goal is to make sure your total expenses plus savings plan equals your income (zero-based budgeting), so every pound is assigned a job.

4) Automate and simplify saving

Make sticking to your budget effortless by putting it on autopilot. Set up automatic transfers to your savings account or ISA each payday. This way, you save before you can even think about spending that money.

Consider scheduling bill payments right after you get paid as well, to avoid accidentally spending it on something else. You can also use tools to automate “paying yourself”: for example, some apps like Kaldi will round up your purchases and stash the spare change as savings. Those tiny round-ups add up. Moneybox found users saved about £437 extra per year just through automated spare-change saving. By automating, you build savings into your budget by default and reduce the temptation to skip it.

5) Track your progress regularly

Once your budget is in action, keep an eye on it. Check in at least weekly to see how much you’ve spent in each category. Using budget tracking with a spreadsheet can make this easier, as you can easily see if you’re nearing your limit on, say, eating out for the month.

If you overspend in one category, adjust by cutting back elsewhere; budgets need to be flexible. Regular check-ins—even 10 minutes on a Sunday evening—help you catch small issues before they become big problems.

It’s normal to tweak your budget over time. If you consistently underspend or overspend in a category, adjust your allocations for next month. The goal is a plan that reflects your real life.

6) Reward yourself and stay motivated

Sticking to a budget long-term is much easier when you have positive reinforcement. Celebrate the small wins. Did you manage to save £100 this month? Treat yourself to a nice dessert or a movie night at a place that offers cashback, so you're still being smart with your spending even during your celebration.

Acknowledging progress helps you train yourself to enjoy saving. Some people also find it motivating to visualise their goal (like a picture of that new car or home) or use challenges or games (no-spend challenge, anyone?) to make budgeting fun. Find what keeps you engaged, and remember why you started. Over time, those good habits will become second nature.

Saving with Kaldi

One way to make budgeting and saving easier (and even enjoyable) is to use tools designed for the job. That would be us, Kaldi. We’re built to help you stick to your budget and save money automatically as you spend. Here’s how saving with Kaldi can give your budget a real boost.

Cashback that boosts your savings

When you shop using your Kaldi app, you earn cashback rewards on everyday purchases. Users get an average 2.7% cashback at top retailers ​, which goes straight into your in-app savings pot. You’re saving money while you spend, without any extra effort. Over time, those cashback rewards can really add up and bolster your budget (imagine getting a few pounds back on the weekly grocery run or each time you treat yourself to anew outfit).

Round-ups save that spare change without the pain

Kaldi automatically rounds up your transactions to the nearest pound and saves the difference for you. Buy a coffee for £2.60, and 40p is swept into savings. You likely won’t even miss the spare change, but in a year you could accumulate hundreds in extra savings thanks to this a little round up here and there. Think of it as budgeting on autopilot as you build a savings habit “little and often” without even thinking about it​.

Easy budgeting tools in-app

We’re not only about saving here at Kaldi. We like to help with budgeting too, and the app provides easy-to-use budgeting tools that let you see exactly where your money is going each month​. You can set up savings goals in the app. For example, saving for a holiday or building towards a home deposit. This makes tracking your progress more engaging and gives you a clear target to work toward, helping you stay motivated as you watch your savings grow with each purchase.

Taking a visual approach like this makes it simple to stick to the limits you’ve set. You get notifications and insights, so if you’re nearing your budget in one category, you’ll know to slow down. Think of Kaldi as a friendly coach, keeping you informed and on-track in real time.

Auto-investing for your future

A unique perk of Kaldi is that it can help you move from saving to investing in the blink of an eye. The app gives you the option to automatically invest your saved money (including cashback and round-ups) into low-cost index and money market funds. In fact, every time you earn cashback, you can choose to let Kaldi auto-invest it into funds managed by providers like HSBC, Fidelity or Vanguard.​ Your spare change and rewards don’t just sit idle and can actually start growing for your future. Even if you’re new to investing, Kaldi makes it simple and beginner-friendly.

(The value of your investments can go up or down, and you may get back less than you put in. Past performance is not a reliable indicator of future results. However, the idea is to potentially benefit from compounding on even small amounts over time through regular, long-term investing rather than trying to time the market.)

Financial education and guidance

We also offer educational content and tips to improve your financial habits because money matters. From budgeting hacks to investing 101, we incorporate learning resources so you can build your money knowledge as you use the app. Think of us as an all-in-one tool to manage your personal finances better​. Having everything in one place means you’re more likely to stay engaged and committed to your budget and saving plan.

In short, Kaldi takes some of the heavy lifting out of budgeting. We automate good habits (like saving and investing small amounts regularly), reward you for the spending you’re doing anyway with cashback and give you a clear view of your money to align perfectly with the goal of crafting a budget you’ll stick to.

Budget-boosting strategies that work

A sustainable budget gives you the freedom to spend on what matters while building financial security. Tools like automated transfers, round-ups and cashback rewards make saving almost effortless. Remember the best budget isn't the most restrictive one. You want one that you’ll actually follow and can build upon. So, start small, be consistent and watch your savings grow.

Remember that when investing, the value of your investments can go down or up, and you may get back less than you put in. This article is for informational purposes only and does not constitute financial advice. If you're unsure about your financial situation or investment choices, consider seeking advice from a qualified financial advisor.

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