Budgeting your personal finances

Getting a clear picture of your income is the first step in creating a budget. Start by adding up all your regular sources of income, which may include: 

• Salary and company benefits
• Pension and social security benefits
• Temporary and freelance earnings
• Investment income (rental income, dividends, yield)
• Occasional income (inheritance, gifts)

Tip: Only include income you’re certain to receive every month. Focus on your income after taxes rather than before taxes, and make sure to estimate your income slightly lower than higher. This gives you a more realistic view of the money you actually have available. 

If your income is irregular 

Changes in your work situation can affect how steady your income is. Budgeting is still useful even if your monthly income varies.  

But be cautious with unpredictable earnings – don’t rely too heavily on one-off payments when planning your budget. A good approach is to spread irregular income evenly across the year and base your monthly budget on the average sum. 

If your income fluctuates significantly, it’s wise to base your budget on the lowest expected amount and save any extra. Building a financial buffer gives you more flexibility and peace of mind in your day-to-day life.  

Once you’ve reviewed your income, it’s time to focus on your spending. Start by identifying your fixed and variable expenses.  

What fixed and variable expenses do you have?

Fixed expenses are the costs you must pay every month, and they tend to stay roughly the same. Examples include living, food and insurance costs. For a balanced budget, fixed expenses should ideally not exceed 50% of your available income.

Variable expenses are non-essential costs that can change from month to month. They include things like leisure activities, entertainment and travel. A good rule of thumb is to keep variable expenses under 40% of your available income.

Track your spending in Nordea Mobile

Use the Insights tab in Nordea Mobile to get a clear overview of your spending over a selected time period. You can edit the settings on the Insights tab to get the data you need.  

You can view your expenses monthly or annually and choose which accounts and cards to include. You can also categorise your spending in a way that suits you. 

Change settings on the Insights tab

Categorise your spending in Nordea Mobile 

Are your expenses exceeding your income? If so, it’s worth considering where you might be able to cut back. But if the opposite is true, you’ve got a great opportunity to make your surplus work for you through regular saving. A good rule of thumb is to save around 10% of your monthly income.

If the answer is no, where could you reduce your spending?

Fixed expenses are difficult to cut since you must cover them to maintain your day-to-day living, but reviewing contracts for things like mobile and internet plans and insurance policies can be an effective way to lower those bills. 

Small everyday changes often have the biggest impact. Take a look at your variable expenses and think about what you could prioritise. Could you skip a few restaurant meals and cook at home instead? Switching from driving to public transport or cycling could also make a noticeable difference to your monthly expenses. 

Another way to save is by trimming down subscriptions like streaming services or other regular payments. You can easily track your recurring subscriptions and payments under Subscriptions in Nordea Mobile. You’ll see everything you’re paying for regularly, from streaming services to phone and electricity bills. And if you spot something you no longer need, you can cancel it directly from the app.  

Track and manage subscriptions in Nordea Mobile

How to master saving from a young age

If the answer is yes, you have an opportunity to build a financial buffer and grow your savings

When your budget is in good shape, you have extra money in your account after covering all your expenses. Consider setting this surplus aside for unexpected costs. A rainy day fund – also known as a financial buffer – gives you peace of mind and financial flexibility in the short term. To get started with building your buffer, you can open a free PerkAccount to earn annual interest on your savings.  

How to build a buffer

If you have already built up your financial buffer, you can start growing your wealth in the longer term. In most cases, we recommend monthly saving in a fund, as the expected returns over time are typically higher than saving in an account. With long-term fund saving, you can bring your future dreams closer to reality. 

How to start monthly saving