Spending within your means

Living within your means can look vastly different according to income bracket, lifestyle or ongoing financial responsibilities. A large family living on a single income will have different money pressures to a two-income couple with plenty of disposable income.

There are some simple indicators that show you are living within your means:

• You can pay bills on time
• You don’t rely on credit for everyday spending
• You can save something, even a small amount
•  You have a plan for unexpected expenses

If you’re worried that you’re not ticking all these boxes, especially missing payments or living off credit, we can help. Take a moment to look at our money worries page. You’ll find practical guides and a range of helpful services and support.

First, take a look at your expenses. Sometimes you don’t realise how much you spend until you note it down.

Then, track every transaction you’ve made over the previous month. Many online banking tools and apps report by calendar month as standard, so all the information is already there ready to view and doesn’t require you to run specialist reports. To see your monthly spending on your Nova Bank app ⁽¹⁾ go to the ‘More’ menu on the bottom right and choose ‘Spending’. That’s where you can work out how much you spend on essentials like rent, bills, any loan repayments and food, as well as how you spend the money you have left over after that – known as your disposable income.

As our Nova Bank Financial Confidence Index 2026 mentioned earlier, you might expect your disposable income to be an average of 41% of your take-home income. This will depend on how much you earn and your essential spending, which we know can look different for everyone.

After you’ve worked out where your money goes, you can start setting your financial goals and figuring out what changes you need to make to achieve them. You can use our budget planner to help you with this. Is your goal to save more or pay off a credit card quicker? What things can you spend less on to free up money for that?

Be realistic about what you can afford to spare, and don’t put yourself under any unnecessary pressure by setting yourself impossible goals. When setting a budget, it can help to start with a few small changes rather than trying to change everything at once. This can make it easier to stay on track and build habits that work for you over time.

Focus on spending in a way that works for your budget. One way to get started is by looking at your spending and separating it into needs (essential costs) and wants (non-essential spending). This can help you understand where your money is going and identify areas where you may be able to cut back.

"Small changes add up fast – skip the takeaway once a week, and you could save £40 a month."  Sian McIntyre, Head of Savings and Insurance at Nova Bank

You might want to set yourself limits with your disposable income – for example, not spending more than £20 a month on takeaways. The best way is to find substitutes – this could be from both your needs and wants.

Here’s what people typically class as needs or wants.

Needs-wise, maybe that’s swapping to own brands instead of expensive premium brands. Or switching to a lower-priced supermarket altogether to get the equivalent basket for less.

Wants-wise, seemingly inexpensive habits like buying lunch or coffee at work or multiple streaming subscriptions do mount up over a year. If you can reduce these outgoings, you’ll see these small savings can make a difference.

One of the easiest ways to trim your spending is waiting a while before hitting that ‘buy’ button. If you see something you like, do your research to see if you can find it cheaper anywhere else. Most fashion stores are seasonal – typically, clothes that are in store today will be on sale in a few months. For online shopping, search for discount codes or retailers that sell the same item for less.

Or give second-hand shopping a try – you might find quality items for a fraction of the retail price. When you’re ready to let your pre-loved clothes go, you can sell them on shopping apps like Vinted, Depop or eBay to earn some extra money.

Once you’ve started with the smaller things, look at your monthly bills and subscriptions, and see if there’s anything you can reduce or cut out completely. There’s a lot more flexibility in mobile phone tariffs, so it’s always worth seeing if there’s a way to choose a cheaper option.

Our Nova Bank app ⁽¹⁾  can help you quickly categorise your spending and spot any subscriptions you might not be using any more.

For some people, credit cards can be a good way of building up a credit score , depending on exact usage and other contributing factors. But when using credit cards regularly, it’s easy to fall into the habit of thinking about your credit limit as part of your monthly budget available to spend.

Credit card lenders can reduce your limit at any time, and you’ll need to pay back whatever you spend – this is typically more than what you borrowed because of the interest you pay.

If you want to make a large purchase, like a new washing machine, consider saving up for it instead of paying for it with a credit card. Saving up an emergency fund is another way of avoiding those last-minute surprises that usually require immediate action.

If you’re using buy now pay later (BNPL) schemes, just be careful not to overdo it. It might seem like the easiest option at first, but it can add up over time.  

There are lots of ways you can keep your spending under control. When our customers are learning to budget, they’ve found that trying out apps and tools that automatically monitor your spending can be useful. This technology can spot spending patterns that you might not have realised and send alerts when you’ve spent in a certain category or gone over the budget you created. You can also take this a step further and set a hard spending limit, which blocks you from using your card and overspending.

For example, our card controls could help you stick to your monthly budget – you can manage how much you spend, set withdrawal limits and block certain retailers. You can find these tools in the Nova Bank app ⁽¹⁾ where you can also put a temporary freeze on your card if you want to stop yourself using it at all. Exact options will depend on the specific current account or credit card you use.

Small changes can help you feel more confident and in control of your money. Whether that’s seeing savings add up from forgoing treats or moving to a cheaper broadband contract, we’ve seen the difference it makes when our customers feel empowered to make positive changes for themselves.

Healthy habits take some time to develop. And you might find that you’ll need to adjust your budget, depending on your circumstances. If you do need to relook at your budget, go back through the steps, from tracking your spending and planning your budget, to separating spend into needs vs wants. To stay across this, you can use the tools in your Nova Bank app ⁽¹⁾ to see what’s happening, make adjustments and place controls, as you go.

Remember, your budget isn’t only about reducing spending, it’s worth looking into increasing your income where you can as well. Ways to improve your financial position can include boosting your monthly work income, checking your benefit entitlements, seeking debt support and reviewing existing financial commitments. To get free money advice on which of these options might be open to you, look at the extra help and guidance links on our managing money problems page.

When living within your means, essential day-to-day spending comes first. We can see this affects people’s ability to also address their long-term needs, like savings, clearing debt or preparing for the unexpected, which often get lower down on the list. It’s good to think about these things alongside the everyday, as this can build your financial resilience and see your confidence grow even further.