Last October I opened the energy bill, saw the direct debit go up by a fiver a month, and genuinely could not tell you whether that mattered. Not because five pounds is nothing. Because I had no idea what our total was.
So I wrote the whole thing down. Every line, once a month, in pounds. This is what it looks like now, three years in, for two adults and two children.
The national figures are sourced and dated. The lines marked as ours are ours, and yours will differ.
The budget
| Line | A month | Where the number comes from |
|---|---|---|
| Rent | £1,393.00 | ONS average UK private rent, July 2026 |
| Council tax | £199.33 | England band D average of £2,392 a year, over 12 instalments |
| Gas and electricity | £143.58 | Ofgem cap of £1,723 a year from 1 October 2026 |
| Water | £53.25 | £639 a year, the 2026/27 average |
| Broadband | £32.00 | ours |
| Two mobiles | £24.00 | ours |
| Food and household | £520.00 | ours |
| Car: insurance, tax, fuel, servicing | £245.00 | ours |
| Bus and train | £40.00 | ours |
| Childcare after the free hours | £310.00 | ours |
| Clothes and shoes | £70.00 | ours |
| Children’s activities | £60.00 | ours |
| Contents and life insurance | £38.00 | ours |
| Subscriptions | £16.00 | ours |
| Haircuts and personal | £35.00 | ours |
| Christmas and birthdays fund | £60.00 | ours |
| Car repairs fund | £50.00 | ours |
| Savings | £100.00 | ours |
| Slack | £40.00 | ours |
| Total | £3,429.16 | £41,150 a year |
Sources for the national lines: Ofgem price cap, MHCLG council tax levels 2026 to 2027, and ONS private rent and house prices, released 19 August 2026.
What that adds up to against the official benchmark
Here is the part I did not expect when I started writing it down.
The Joseph Rowntree Foundation publishes a Minimum Income Standard: what members of the public, in detailed groups, agree a household needs for a minimum acceptable standard of living. The 2026 edition, published on 8 September 2026, puts a couple with two children at £1,309.64 a week including rent and childcare. That is £5,675 a month.
Ours is £3,429.16. We are running about £2,246 a month, or 40%, below what that standard says a family of four needs.
I am not going to dress that up as thrift. On JRF’s measure we are a household living below the minimum income standard, and so are a lot of people reading this. Two lines explain most of the gap: their childcare assumption is far higher than ours, and their basket includes a level of holidays and social participation that ours does not.
Where the money actually goes
Rent is 41% of everything. That is the whole story of this budget and there is no clever tip underneath it. Nothing else comes close.
The four fixed household bills, council tax, energy, water and broadband, come to £428.16 a month between them. That is more than we spend on food.
Food at £520 a month is £30 per person per week. That is the line everybody wants to talk about and it is not where the pressure has been this year. ONS figures published on 19 August 2026 put CPI at 2.9% in the 12 months to July, but food and non-alcoholic drink at just 1.3%, the lowest since September 2021. The upward pressure came from housing and household services, with gas prices up 14.7% in a single month.
Which is the opposite of how it felt, and the opposite of how it gets discussed.
The mistake I made for two years
I budgeted energy at the annual average and congratulated myself on being organised.
The annual average is real, but the usage is not evenly spread. We would drift through the summer with the direct debit comfortably covering a small bill and building a credit balance, then burn through it by the end of January and get a letter asking to raise the payment in February, which is exactly the month the credit card bill from Christmas landed.
The fix was not more money. It was leaving the direct debit level all year and treating the summer credit as a deliberate reserve rather than a windfall, and then not touching it. Obvious in hindsight. It took two winters.
The same logic produced the two sinking funds at the bottom of the table. £60 a month for Christmas and £50 for car repairs are not savings. They are bills that arrive irregularly, and treating them as surprises is what used to put us on the credit card every January and every MOT.
The three increases coming that I have already budgeted for
- Energy, from 1 October 2026. The cap goes from £1,663 to £1,723 a year for a typical dual fuel household paying by direct debit. That is £60 a year, or the five pounds a month that started all this.
- Council tax. The England band D average rose to £2,392 for 2026/27, up £111 on the year, a 4.9% increase.
- Water. Average bills rose £33, or 5.4%, to £639 from 1 April 2026, on figures from CCW, the statutory consumer body for water.
Those three together are about £204 more a year than the year before, before rent moves. Average rents were up 3.7% in the year to July 2026.
The counterweight
A written budget does not create money. Ours is 40% below a recognised minimum standard and writing it down did not change that by a penny. What it changed is that I now know which line to look at when something goes up, and I stopped being surprised in February.
The other honest thing to say is that the biggest line, rent at £1,393, is the one I have least control over, while most of what gets published about frugal living concerns the lines at the bottom of my table. Cancelling the £16 of subscriptions entirely would cover about 1% of what we spend.
What I would do
Write down the whole thing once, in one sitting, including the lines you would rather not look at. It takes about forty minutes and you only have to do it properly once.
Then find your sinking funds. Not savings, the irregular bills: Christmas, the MOT, the boiler service, the school shoes in September. Divide the year’s worth by twelve and move it out on payday. That single change did more for us than every switching tip I have ever read.
And check your energy direct debit against your actual annual usage rather than your current balance, in September, before the winter starts drawing it down.
Frequently asked questions
What does a family of four actually need each month? The Joseph Rowntree Foundation’s 2026 Minimum Income Standard puts a couple with two children at £1,309.64 a week, or about £5,675 a month, including rent and childcare.
How much should I budget for energy in 2026? The Ofgem cap for a typical dual fuel household paying by direct debit is £1,723 a year from 1 October 2026, which is £143.58 a month. Your own usage may be well above or below typical.
Is food really the biggest pressure right now? Not on the national figures. Food and non-alcoholic drink inflation was 1.3% in the year to July 2026, its lowest since September 2021, while housing and household services were the largest upward contribution.
How much is council tax in 2026/27? The average band D bill in England is £2,392, up £111 or 4.9% on last year. The average across all dwellings is £1,868.
Updated on 11 September 2026.
Sources
- Ofgem, energy price cap unit rates and standing charges
- MHCLG, council tax levels set by local authorities in England 2026 to 2027
- ONS, consumer price inflation, published 19 August 2026
- ONS, private rent and house prices UK, released 19 August 2026
- Joseph Rowntree Foundation, a Minimum Income Standard for the United Kingdom in 2026, published 8 September 2026
- CCW, the statutory consumer body for water
This is one household’s budget and a set of national averages. It is not financial advice.…