How to Budget on a £30k Salary (Step-by-Step Guide)

Living on a £30k salary in the UK is definitely manageable, but without a plan, it’s easy to feel like your money disappears before the end of the month. A smart budget helps you cover essentials, enjoy life, and still save for the future. Here’s a step-by-step guide to building a budget that works on a £30k income.

Step 1: Work Out Your Take-Home Pay

£30,000 a year works out at around £2,000 per month after tax (depending on pension contributions, student loan repayments, and NI). This is the number you’ll be budgeting with — not the gross £30k.

Step 2: Use a Simple Budgeting Rule

A good starting point is the 50/30/20 rule:

50% Needs (rent, bills, transport, groceries) → ~£1,000 30% Wants (eating out, subscriptions, hobbies, shopping) → ~£600 20% Savings/Debt (emergency fund, investments, debt repayment) → ~£400

You can adjust these percentages to suit your lifestyle, but this framework helps keep balance.

Step 3: Prioritise Housing and Bills

Try to keep rent or mortgage payments under 30–35% of your income (~£600–£700). Add utilities, internet, and council tax to see the true cost of your living arrangements. If this takes up too much of your budget, you may need to cut back elsewhere.

Step 4: Track Your Spending

Use a free budgeting app or a simple spreadsheet to see where your money goes. Many people are surprised by how much slips away on small daily purchases. Tracking helps highlight areas to cut back.

Step 5: Build an Emergency Fund

Aim to save at least 3 months of expenses. Start small — even £50–£100 a month adds up over time. Having a safety net keeps you from relying on credit cards when unexpected costs hit.

Step 6: Plan for the Future

Once you’ve covered essentials and built some savings, think about long-term goals like a house deposit, travel fund, or investing for retirement. Even small contributions to a pension or ISA can grow significantly over time.

Step 7: Cut Costs Without Cutting Fun

Budgeting doesn’t mean missing out. Look for:

Free or low-cost activities in your area Cooking at home instead of takeaways Sharing subscriptions with family/friends Using cashback or discount sites for everyday spending

These small tweaks can free up £100+ per month without a big lifestyle change.

Final Thoughts

Budgeting on a £30k salary is all about balance. By covering your essentials, giving yourself room for fun, and still putting money aside for savings, you can make steady financial progress without feeling restricted. The earlier you start, the easier it gets.

✅ Find out more about the 50/30/20 budget method here!

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