How to plan your finances 12 months ahead

Most money stress isn't caused by overspending. It's caused by costs that were always coming but were never written down. A twelve-month view fixes that in an afternoon.

1. Write down every non-monthly cost

Go through last year's bank statements month by month. You're hunting for anything that isn't a normal monthly bill: insurance renewals, MOT and servicing, Christmas, birthdays, school costs, holidays, dentist and optician, annual subscriptions, boiler service, and the small repairs that always seem to arrive.

2. Turn each one into a monthly amount

Divide each annual cost by twelve, or by the number of months before it's next due. £600 of car insurance in nine months' time is £67 a month starting now. Add them up: for many households the total lands somewhere between £150 and £400 a month, which is usually the missing piece in a budget that "should work but doesn't".

3. Map income against the calendar

If you're paid four-weekly you get thirteen pay days a year, and one month with two of them. If your council tax runs over ten instalments, two months are lighter. Note these so you plan on the tight months rather than the generous ones.

4. Find the pinch points

Now look across the year. There will usually be two or three months where costs cluster. Knowing that in March you'll want an extra £400 available is what stops March becoming a credit card month.

5. Protect what's genuinely spare

Whatever survives all of the above is your real spending money. Keep it separate from the money that's committed, and decisions about holidays, purchases and days out become straightforward. Our methodology page shows the same calculation in full.

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