Debt Free Darling

Striding into 2026 with confidence

As the 5th of January comes to a close; I feel that I can say I have a solid plan and an idea of where to start. Armed with a cup of tea and determination, I’ve thrown together a rudimentary spreadsheet to track my income, expenditure and debt snowball. As long as there’s somewhere to throw the data, I’ll come back and make it pretty another time.

This is my basic household budget for the beginning of 2026. You’ll notice that there are no utilities, rent or other contractual payments included.

We’re covering the everyday essentials here, the aim being to see how far I can stretch things.

Instead of allocating funds to pots (which I subconsciously interpret as permission to spend), I’m testing whether using an upper limi for each catagory works better for me. There are no separate pots to empty, only one which must cover everything. I’ve allocated a little more than I would regularly spend to clothing and petrol; fuel prices are pretty stable right now, but after a recent family emergency, I’d rather have a buffer. As for clothing, I don’t expect to use that amount every month, but would prefer to know that replacing my good shoes won’t derail the budget.

I’ve been working with something similar over the past six months, making tweaks every so often as patterns emerge. I know for a fact that I’ve managed to avoid paying Toll fees on my commutes for a quite a few months now (I’ve changed my route without losing time)… if I can make it a full six months, I’ll shuffle the caps around, or add a little more to the snowball, or somewhere else it’s needed. I’ve intentionally kept the groceries budget quite low; with cupboards overflowing from staples I forgot I already had, now feels like a good time to financially bounce back from Christmas, make a dent in 2025’s stockpiling.

From here, we can move on to the fixed expenses – everything highlighted red or orange, is something I have determined as essential.

You’ll notice that I do not have a rent or mortgage payment: it’s not that I’m lucky enough to own my home, but live with my partner who has sole ownership of the property. I contribute a nomial amount monthly towards utilities, and pay my “rent” directly into my emergency fund (refilling this is included in my snowball).

The Emergency Bumper rolls over every month and only needs topping up if I’ve used it. Off the top of my head, I’ve dipped into it once in the past six months, and I was very glad it was there. Medical is my direct debit for an NHS Prepayment Certificate – with two regular medications a month, I save a minimum of £123 a year, a little more if I get sick and need another prescription.

My Airtime plan is with Lebara, who are great in my area. The super-cheap deal I’ve got will go up to it’s normal price in a couple of months, but it’s still under £10 for 50gb of data and unlimited everything else. And I try to put something aside in my savings and Lifetime ISA every month, cause having a little set aside for chaos and adventures is always helpful.

With Christmas over, and a place to start, I’m confident that I can make leaps and bounds towards financial freedom in 2026. There’s a gentle cash challenge I’m considering, born from something bittersweet. I’ll share the full story and my rules a little later this week.