I Earn £51K, My Wife Earns £37K. This is How We Budget and Save Money Each Month

The number one rule to save money, budget and spend less than you earn. In an ideal world, financial advisers recommend that you should be saving at least 20% of your monthly salary for the future, that said, often it’s not possible. It’s not, not possible because you don’t earn enough, it’s because you don’t plan a monthly spending budget and then you waste money on stupid things.

The first part of any saving plan is to save smartly. It is simply not worth compromising on the essential things to try and save money, as it will end up costing you more in the long run. As an example, watch out you eat correctly and take the exercise during the week, otherwise, you’ll end up in trouble by spending more on health and medical expenses.


There are two steps in planning your budget. The first, you need to have an emergency fund. This is a set amount of cash that you don’t invest, you don’t spend and you leave in your bank account for an emergency. Personally, I have £10,000 is my bank account that I leave for emergencies. This represents about the months of fixed costs that I need to pay each month to support my family.

The second step of any savings plan needs to be your budget. You need to both plan your spending allowances ahead of time, but also budget yourself so you know what you can spend each month.

Below is my wife and I’s budget each month. It shows clearly where we can spend money, and where we save. If we decide that we want to buy something, firstly we look at the budget, if there is the money, we then look at ways to save money buying it.


Gross IncomeAnnualMonthlyNotes
David, Gross Salary £51,000£4,200My Bonus is discretionary and therefore its excluded from these figures – It’s been as high as £15K, but last year it was £9,000 and I would highly doubt I’m getting a bonus.
National Insurance Contributions (State Pension)£4,984£415
Work Pension£4,080£340Total Pension Contribution 5,513 (with Employer Contribution (5% & 3%)
David’s Net Salary£35,054£2,921
Sarah, Gross Salary 37,0003,083(No Bonus)
National Insurance Contributions (State Pension)£3,300£275
Work Pension – with Employer Contribution (5% & 3%)£1,538£128
Sarah’s Net Salary£27,569£2,297
Other Income Gross36,0003,00040% tax rate due to higher rate tax bracket (£50,001 to £150,000)
Other Income Net216001,750
Total Yearly Income (NET)£85,350£7,062

Housing Cost’s

Housing CostsAnnualMonthlyNotes
Mortgage Costs£14,909£1,242We have a £300,000 mortgage. It costs £1,242.56 in repayments using an 80% Loan to value (LTV), fixed for five years at 1.80%.
Council Tax£1,687140.58
Electricity / Gas (Average)£1,308£109
Internet / Home Phone£276£23
Pay TV£119£9.99Yes we have Netflix
Budget for Renovations & Maintenance£2,400£200
Home Insurance (Buildings/Contents)£144£12
Food for family of four (2 Adults + 2 Children)£7,740£645
Total Housing Cost£29,243£2,436

Children Related Costs

Children Related CostsAnnualMonthlyNotice
Childcare £6,295524(Full Time – £232, Part-Time 122 – Per Week)
School (Sports, Activities, Excursions, School Uniforms, Other)£1,800150
Child Expenses (Doctors & Dental)£2,600300
Total Cost£10,695974

Personal Cost’s

Personal CostsAnnualMonthlyNotes
David’s Mobile£600£50
David’s Life Insurance£660£55£500K with a 30 years lifespan
David’s Car Cost £3,576£298(Bought New in 2018, Golf 1.4 )
David’s Car Cost’s £3,600£300Car Insurance £350, two tanks of petrol per month 118 each, a basic service in the local garage.
David’s Personal Cost’s£3,600£300
Sarah’s Mobile£600£50
Sarah Car Cost£0£0Bought new in 2014, very little costs
Sarah Car Cost’s£3,600£300Car Insurance £350, two tanks of petrol per month 118 each, a basic service in the local garage.
Sarah’s Personal Expenses£3,600£300
2 Family Holidays Each Year£8,000£6662 x 2-Week Holidays for a family of four to Europe
Joint Weekly Entertainment£6,000£500Includes date night once a week, sport, gym membership
Pet Care & Vet£1,800£150
Total Cost£35,636£2,969

Investment Cost’s

ISA£6,000£500I save £500 each month directly into an ISA. However with limits at £20,000 today, I try to fund it to this limit.
Emergency Fund£0£0I keep £10,000 in my bank account at all time. This is my emergency fund if everything goes wrong.
Investment Account£0£0I keep a separate trading account on the side. In those years when I get a bonus, and we don’t spend

Total Expenses Vs Income

Income / Expense TotalsAnnualMonthlyNotes
Total Income£85,350£7,062This excludes any bonus’s while taking into account an average of £21,600 in secondary income which is the average we have made over the last two years.
Total Expenses£81,574£6,797
Balance At The End of The Year£3,776£314This is a flexible balance at the end of the year. Id I get a bonus, you can add £10,000 to this figure. A the same time, we’ve had some great month blogging, especially when you get to sell a site.


The above budget shows clearly that we have a good life. We enjoy life, but we also save for the future. Most importantly, we know where we cut cost if needed, and what we have to earn each month to break-even.

If the worst happened and we both lost our jobs, there is cash from our emergency fund ready to be used. We also have a second and third income streams that could be used to sustain our lifestyle. If I lost my job, it would cause serious problems, but due to the budgets, the planning, and second income streams, we would be able to ride out the financial down-turn. Could you do the same?


TheRetirementBlog.co.uk is written by David Jacobs who is on a quest to retire early and get out of the rat race. David is a financial expert who lives for early retirement. Follow his journey making money, saving and investing to retire early and get the best out of his retirement.

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