5 steps on How to Budget for Doctors in the UK

A major move like coming to the UK can be a thing to reel from. You may for the very first time of your life be expected to manage your finances and understand how to make a budget , how to balance a check-book. It’s a lot to handle, especially if you’re unsure about how and when to start and how to keep it running smoothly.

What you may instead feel is that you’ve snagged yourself a job, you’re settling in, you’ve gotten your first paycheck, and all you can think about now is:


While that is completely understandable (and warranted!), it can’t become an unbridled habit. So let’s discuss the importance of creating and sticking to a solid budget so that you can make the most of the money you earn.

Step 1: Know Your Salary

That sounds easy enough, doesn’t it? But it’s much more than just knowing you make however much a year. You should be sure to check your pay stub at the end of each month to see your total income and what goes into your taxes, pension, etc. What you have at the end (your net income) is what you’ve got to keep in mind when structuring your budget.

Make sure you pay attention to your pay slip each month!

Step 2: Track Your Spending

Keep receipts and written records of your spending and savings in a ledger or track it in any way that helps you understand how much money is being spent over a given period of time and on what. This will help you create goals or spending targets so that you can stay within a workable range.

Step 3: Know What Your Saving For

Make a list of what you’ll be saving your money for, be it short term or long term. This will help you stay focused on the task at hand and keep a goal for you to achieve. For example, you may have a short term goal of saving up enough for a new phone, but a long term goal of saving for a new car. Whatever you choose, make sure you label your intent so that it remains clear. If you still need to look into how to save more, check out how to save money.

5 pounds of bill rolled

Step 4: Stick to the Budgeting Rule

Now this rule to make a budget can be made flexible to your own needs, but I personally feel it is a good place to start out. What I am referring to is the 50/30/20 approach to spending and saving. What does that mean?

50% of your net income should go towards the things you need. Food, rent, utilities, any car payments, mortgages, etc. What you need may differ from what someone else needs, so chalk out which things are immediate and fundamental needs.

30%  of your net income should go towards the things you want. Now hold on. That doesn’t mean a shopping spree. These can be pretty close to what you’d consider as needs, but in reality are things you could technically survive without. What I mean by that is things like wifi, cable, an unlimited phone plan, etc. Again, your wants may differ, so adjust accordingly.

The remaining 20% of your net income should be used to pay off any debts, saved for a rainy day (an emergency fund), or be used towards a retirement plan (separate from the NHS pension). You can also use part this money to plan for some future purchase, such as for a car or a house.

Let’s break this down further. Let’s assume that after all deductions and considerations in your salary, you are taking home £2,500 a month. £1,250 would be your needs, the money you’d spend on the essentials. £750 would go towards your wants, the things that make life nicer. £500 is what you’d save at the end of each month, and/or use towards something else (debt, etc).

Another point needs to be made clear here: just because a percentage falls under needs or wants and goes unspent, does not mean you have to spend it. It can be moved into your savings. For example, if we continue to consider the breakdown above, if you find a place to stay, taking into account food, utilities, etc and find you are only spending £1,000, the remaining £250 can be put towards wants or savings.

It is imperative to be smart about your spending. This does not mean you should be miserly, but at the same time you should not be extravagant. I have myself maintained a strict tracking system of knowing my expenditure and costs, and on average do not spend more than £850 per month when taking my needs and wants into consideration. Everyone will have a different baseline. What is important to realize is what limit you can go to and how much money you want to save per month.

You can also be mindful of where you money is being spent or what you are saving where by creating ‘pots’ with bank accounts like Monzo. Use the link given to start off your account with £5!

Step 5: Be smart in sending money home

The conventional ways of sending money via direct bank transfers is a thing of the past. That takes longer time, bad conversion rate and maybe hidden charges. There are two companies that we have used to send money home from the UK with the utmost confidence, good rates, and transparent charges.

There is WISE which comes with a borderless debit card as a cherry on top to simplify life when you travel the world.

To summarise the steps on how you can effectively make the best use of your money by making a proper budget:

Know your earnings

Trust me, if YOU don’t regularly check your payslips, no one will. Make sure you are getting appropriately for the locum/extra shifts that you did. Also the unsocial and weekends – as they mentioned separately. See what your taxable income was and make sure everything – tax wise was paid without any issue.

Keep track of your expenses

Almost all the card providers have the opportunity to track your spending. Make use of that to at least identify where is your money going.

Have a defined savings goal

Making achievable targets and finally achieving it, gives you big confidence boost. Saving up for a car is a very good example. I use Monzo to help me stay on track.

Stick to a budgeting rule

As mentioned in the article already, follow that rule to to achieve what you want to achieve.

Find easier ways to send money home

There are many options available these days. I use Wise as it saves me the most.

To conclude

At the end of the day, you need to be reasonable. You cannot go into this thinking you need to earn x amount every month and in order to do that you will heavily restrict your wants or needs. You also can’t have the mentality that you have little to no responsibilities right now, which warrants you spending as much as you’d like whenever you’d like. Making and sticking to a budget is an art, and it will take time to tailor to your situation. Be patient, and you’ll do just fine.