How much is a reasonable personal budget pm?

[Motherofdragons24]

So my resolution for 2025 is to start saving more. Between DH and I we have a healthy income have some good savings and no debt (other than mortgage and car finance which is affordable) so are in a good position financially but I feel like we should be able to save a lot more than we currently are and just feel like we’re both a bit frivolous with money. When I look at my bank statements it is littered with dozens and dozens of purchases for under £5, it’s not even as if I’m spending it anything exciting or interesting! I’m definitely guilty of beeping my phone too often!

my plan is to give myself a monthly allowance of sorts that will encourage me to stay within that amount, a bit like a challenge. So not including bills, food shop, subscriptions, childcare costs what is a reasonable amount for this? Purely things I would buy for myself like cosmetics, lunch’s at work, hair appointments, meals out, new clothes and shoes and any treats for myself, that kind of thing.

That’s a great resolution to have! I’m trying to be a bit more strict with my budgeting too.

Sorry if this sounds obvious or patronising (I don’t at all meant to!) and I’m sure you’ve heard this before, but I’d suggest starting with your monthly income, subtracting from that your main essential living costs (mortgage, bills, transport, phone, food, dental appts, clothes/school-related costs for your kids if you have any, pet expenses if you have pets) and seeing how much you have left.

Out of the amount you have left, you’ll probably want to allocate some of this for ‘fun stuff’ - e.g. meals out etc - and savings.

You could also consider giving yourself a monthly ‘budget’ in a different account to your normal one, if that helps with budgeting. For example, my salary gets paid into my main bank each month, but I have a separate account with Monzo, which is my ‘fun money’ for the month, which I put into different pots, as I find that a straightforward way of organising my money.

To help work out how much to save, perhaps work out how much you currently save and then work out if you want to increase that. I find it helpful to set up an automatic payment so the money I’ve allocated to savings leaves my account each payday and goes into my savings account, so I’m not tempted to spend it

Are you aiming to save for anything in particular? And out of the savings you already have, have you set aside some of them to draw on just in emergencies (e.g. house repairs, boiler repairs etc)? That’s always a good idea, as if you ever found yourself needing to draw on them, you wouldn’t need to get a high interest loan or anything like that.

Check every few months that your current savings and any money you’re adding to hour savings is in the highest interest account possible - perhaps lock some of it away for a few months or a year or two, as fixed rate savings will often give better returns.

And have you got any savings invested in stocks and shares? If you’re comfortable with the idea of stocks and shares and with not using that money for at least 5-10 years, I’d suggest considering investing some of your savings, as that can be a good way of getting good returns. Do make sure you have a good amount of cash savings (e.g. 3-6 months expenses) in an easily accessible account though.

Good luck!

Thank you for your reply!

yes this is exactly what we have done this evening. So after bills, cars, childcare costs, kids clubs, subscriptions, phones, food shopping etc, basically all the stuff we NEED to pay for we have about £3k left a month. And if I’m being perfectly honest, monthly we save very very little from this. We eat out too often and as I said are just generally too frivolous. Your idea of putting money into a separate account is exactly what I was planning to do. I recently started doing this with my food shop to get that under control and it’s worked amazingly well and I quite enjoy to challenge of trying to keep the monthly food shop under the £400 I’ve allocated.

we’re not saving for anything I particularly and we do have some good saves already but I suppose I have a bit of a guilty conscience that a lot of our spending is so wasteful as like I say it’s not even as if I’m buying anything exciting or interesting stuff and my DH is no better than me! I was thinking £500 pm each but my DH looked at me in horror and said this wasn’t enough but I think we’ve lost sight of what is normal spending.

You could always start with a £500 pot each and see how you go?

This may be a cringey suggestion, but maybe set aside a night each month where you and your DH get some wine/nice drinks and food in and spend say an hour reviewing your finances for the past month and how’s it felt managing on that pot each. Then give yourself grace if there’s something you’ve really missed and not been able to do because of the budget and up your budget for your next month.

It will probably feel difficult and annoying adjusting and being stricter, but as long as you’re still including nice enjoyable things and including things you know you’d miss if you didn’t have them, you can make it fun and you’ll be impressed at how much more you’ll save. And you’re already in a good position as you’ve got savings built up already.

£500 sounds a good amount to me!

I was thinking about this a little while ago when my partner and I were considering blending finances - that's off the table at the moment as we sadly broke up, but we have been seeing each other again so who knows?

I wanted to work out a fair equal amount that would cause neither of us personal hardship but also enable us to save. £500 amount seemed to meet that. (Neither of us like eating out or socialising loads - but we do both have some hobbies that would need to be paid for, that shouldn't come out of the joint pot in my opinion as that's personal stuff.)

Why not trial it with £500 and see how it goes?

There is no right answer to this as it depends on affordability and priorities for personal spending vs other things and getting the balance right. This will be different depending on stage of life, personal preference etc etc.

But things to bear in mind, you can only spend each pound once, so money spent on personal frittering is money that's not available for other things, most of which are likely to be more important in a sensible budget.

It would be really good to get out of the habit of financing cars, as this increases your compulsory outgoings, which is a problem if you suffer loss of income and is also likely to work out more expensive over time. So one aim could be to pay for your cars out of savings, not with debt.

Also think about your medium to long term priorities as controlling your spending now can have a huge impact on whether you can over pay your mortgage, work less, retire earlier etc because the less you spend on day to day non essentials means the more you can save and overpay which allows you to work less/retire earlier. Also if you live on less money, you don't need as much income to be able to retire.

Also think about small purchases and how they add up and what 'big' things you could buy with that money.

For example, if you bought one £4 coffee a week instead of one a day that's a reduction of £16 a week, nearly £70 pm or over £800 per year, just on coffee. That could pay for a weekend break, replace an appliance or two or pay a chunk off your mortgage.

But your plan for a personal allowance sounds good and I think £500 is generous, but others would disagree.

We do this and I have 1,000 euro for a month that I transfer to Revolut. I use pockets to save some of that for quarterly expensive like my hair appointment and Botox and I’m saving for a bag so after putting money in my Revolut pockets I have about 650 left.

We have £500 between us and that tends to be enough BUT I don't go to the salon or anything like that.

it might be worth trying the 50-30-20 rule if it works for you? 50% of your monthly income on needs (housing, bills, groceries, etc), 30% on wants and 20% on savings.

I follow this and the rule of ‘pay yourself first’, so at the beginning of each month I pay my ‘wants’ budget into a separate account for spending and my savings budget into savings accounts, and keep the ‘needs’ budget in my primary account. There’s a little flex based on where DDs were historically set up.

You have to work out if you can work to 67/8 in your job and how much earlier you need to retire so how many years of normal spending on essentials do you need.

And then work out how to save that money over the rest of your working life.

We are almost both retired 9 years early, and do not regret the lack of frivolous spends, coffee out every day and expensive meal deals one little bit .
Spread sheets are your friend, and so is Money Saving Expert frugal living advice. And how much do you need for retirement and FIRE

9 years early retirement, no mortgage, and enough health and fitness to enjoy travel.

Save for future self first.

And we have £200 each for 'pocket money'.

Are you putting any money in savings or would any savings come out of the £3k?

We have about £2.5k after essentials, and half of that goes into savings on pay day.