Budget & Savings Planner

It suggests 50 per cent of net income on needs, 30 per cent on wants and 20 per cent on saving and debt repayment. It works well as a diagnostic and badly as a target. In cities where rent alone takes 45 per cent of a median salary, the rule declares almost everyone a failure, which tells you about the housing market rather than about the person budgeting. Use it the way this planner does: as a line beside your own numbers, to show whether your spending is unusually concentrated in one place. The categories are more useful than the percentages.

Three to six months of essential spending — not of income, which is a common and expensive misreading. Essential means the rent, food, transport and bills you would still pay if your income stopped; it does not include holidays or the gym membership you would cancel. That is usually a much smaller and more achievable number than three to six months of salary. Employment stability shifts the target: a salaried employee with good notice can sit at three, a freelancer with lumpy income should aim closer to six.

Almost always annual costs entered as if they did not exist. Insurance premiums, car servicing, birthdays, one large holiday, an annual software renewal — none of them appear in a typical month, and together they routinely account for 5 to 10 per cent of a year's spending. Add up everything that arrives once a year, divide by twelve, and put that figure in "everything else". The budget will look worse and it will finally match your bank statement, which is the entire point of doing it.