How to use reverse budgeting to get to the end of the month WITHOUT running out of money… and start living again

How much money do you spend on yourself? When most of us pay off the mortgage, bills, groceries and subscriptions each month, there’s little left over for frivolous expenses.

Any spare cash is usually dutifully transferred to a savings account. However, in order to enjoy your hard-earned money and life to the fullest, it may be important to save for sunny days as well as rainy days. Experts suggest treating yourself occasionally can even help you budget in the long run.

Eight in 10 people plan to spend less in 2026 to manage their budget and achieve their financial goals.

But Brian Byrnes, head of personal finance at app Moneybox, says: ‘Budgets often fail because they ignore something important; ‘Sometimes we all need to enjoy our money.’

With the help of four experts, we explain how to make it to the end of the month without running out of money so you can build a guilt-free savings pot to splurge safely and start living the way you want again.

Think of spending like a balanced diet

If you restrict yourself to a punishing diet, you’re more likely to fall off the wagon and overeat at the end of the month.

The same principle applies when it comes to spending money; always save and save; You may find that you have wasted all your savings while trying to reward yourself at the end of the month.

But always save and save; You may find that you have wasted all your savings while trying to reward yourself at the end of the month.

‘Money is emotional, a bit like food in that way,’ explains James Anderson of personal finance website Be Clever With Your Cash.

‘So finding a way to be sustainable when it comes to saving and spending is really important.’

Your guilt-free spending doesn’t need to be large or extravagant. Little treats that bring you joy can make you feel like you’re starting to live again if you’ve been inundated with household bills.

Finance blogger Lynn Beattie, who runs the @mrsmummypennyuk Instagram page, says: ‘If I don’t get my nails done my mental health will suffer. Spending £35 a month getting my nails done every month gives me a new life. But when you’re short on money, even £1 for a bunch of daffodils in the shops can be a relief.’

Easy ways to save money

Using a tactic called reverse budgeting can give you oversight on areas in your budget where you’re needlessly losing money.

Reverse budgeting means reviewing what you actually spent last month, rather than guessing what you’ll spend next month. This includes subscriptions, takeaways, small daily expenses and forgotten direct debits.

Byrnes says: ‘It’s worth looking back before making dramatic changes to your savings and spending allocation. Examining subscriptions and recurring payments often reveals wasted expenditure.’

Lynn Beattie, aka Mrsmummypenny, says sometimes even the smallest spend can bring the best results

James Andrews suggests trying a general savings account and a regular savings account to easily build a pot at the end of the month.

Rollup accounts are now a feature offered by many banks, including NatWest, Lloyds, Nationwide, Starling, Monzo and Chase. When you turn on this feature in your mobile banking, everything you spend on your debit card will be rounded up to the nearest pound and the spare change will be sent to your savings account at your bank.

A regular savings account allows you to save small amounts each month and earn a high interest rate for a fixed period, usually 12 months.

For example, First Direct’s regular saver pays 7 per cent interest on those saving between £25 and £300 a month. Interest is calculated daily and paid after 12 months.

Mr Andrews suggests that instead of putting the extra income into your pension or emergency savings pot, you could spend it on nice things like a holiday or a nice meal at the end of the 12 months.

If you deposit at least £25 a month into First Direct’s regular savings account for 12 months, you’ll have £311.38.

But a maximum of £300 a month, if you can spare it, would be £3,736.50; but you may want to keep some of it in savings.

Lynn Beattie suggests trying Plum and Chip apps, which connect to your current account to analyze your income, bills and expenses if you let them. They will then deposit small amounts into a savings account, little and often, that they calculate you can afford based on your habits.

Saving this way means you won’t have to withdraw money from your current account or even see it come out; This way, you avoid the guilt of feeling like you’re wasting money on meaningless things.

If you owe

Paying off your debts while paying your household bills can make it difficult to keep your head above water, let alone have anything left over at the end of the month.

But there are ways to deal with this.

Mr Andrews says: ‘Accept your debt and be realistic about your situation. ‘There’s no need to snap out of this situation or punish yourself.’

One of the best ways to get some breathing room while attacking your debt is to use zero percent balance transfer cards.

These allow you to transfer your existing credit balance to a new card and pay off your debt faster without accumulating interest; because providers often have an initial interest-free period of several months.

Balance transfer cards can be a crucial tool to save you more time, but it’s important to be disciplined and pay what you can afford each month without being tempted to spend more on the card.

The longest 0pc deals are currently 35 months. To enjoy the full benefits of a balance transfer card, you should aim to pay off your balance before the 0pc promotional window ends.

Providers tend to charge a fee to switch cards and customers are transferred to a high interest rate after the 0pc period.

When used correctly, you can save a significant amount of money with these cards and strengthen your debt repayment plan.

For example, if you owe £3,000 on a card that charges a standard 24.9 per cent APR, you’ll have to pay £62.25 in interest each month – and that’s before you pay off any of your debt.

If you transfer that £3,000 debt to HSBC’s Balance Transfer Card, the one-off transfer fee will cost you £95.70 (3.19pc), leaving you with a total of £3,095.70 to pay over 35 months (£88.45 per month).

The good news is that you no longer have the additional £62.25 of interest to pay each month on top of your original debt.

If you think you can pay it off quicker than this, shorter balance transfer terms of 0pc with no transfer fee are available.

For example, Barclaycard offers 0pc and no fees for 14 months; to pay off the £3,000 balance during this time you would need to pay £214.28 per month.

If you still have nothing left

If you’ve cut back on all areas of your budget and still feel like you’ve got nothing left, there are some simple ways to boost your bank balance to feel better at the end of the month.

For example, renting a room to a tenant could earn you an extra £700 a month. The average room in London can be rented for £985 a month, while outside the capital the average is £670. The government allows you to earn up to £7,500 a year tax-free through the Room Rental Scheme.

If you have a spare room or shed that you’re not using, you can rent storage space for £1,386 a year, depending on the area you live in, according to storage company Stashbee. A garage can yield between £1,200 and £3,600 per year in standard locations, and up to £11,000 per year in high demand areas. Access to areas with security features such as CCTV or gates can provide more.

Leaving your driveway to those desperate for parking for football matches and concerts could earn you up to £1,800 a year in spare cash.

The amount of money you can earn depends on your location. Parking spaces near concert halls, football stadiums, airports and train stations are most popular.

Stashbee, which also offers a parking rental service, says users can earn between £720 and £1,800 a year, rising to £1,800 and £3,000 for spots close to stations or city centres.

What techniques are there Have you gotten out of debt? Let us know at moneymail@dailymail.co.uk