Making a monthly budget is a simple way to take control of your money and work toward your goals. A budget helps you see where your money is going and how to adjust it to fit your needs. If you’ve never budgeted before, start small—it’s easier than you think. Here’s how to get started, one step at a time.
Know Exactly What You Earn
First things first: figure out how much money you actually have coming in each month. Look at your take-home pay—the amount left after taxes, insurance, and other deductions. If you’ve got a couple of income sources, like freelance work or side jobs, include those too. You need a clear picture of your total income before you can start planning where it goes.
💸 Take Back Control of Your Finances in 2025 💸
Get Instant Access to our free mini course
5 DAYS TO A BETTER BUDGET
Write Down Your Expenses
Next, list out everything you spend money on. Start with your fixed expenses—rent, insurance, car payments, and things that stay consistent. Then, tackle variable expenses like groceries, entertainment, or clothing, which can change from month to month. Getting it all on paper (or even in an app) helps you see the full scope of your spending.
Differentiate Between Wants and Needs
Not all expenses are created equal. Take a closer look at your list and mark which things are true necessities (needs) vs. extras (wants). Needs include essentials like housing and food. Wants are things like takeout, subscriptions, or random online shopping sprees. Identifying these makes it easy to see where you might be able to cut back if needed.
Track Every Dollar You Spend for a Month
Before diving headfirst into budgeting, spend a month tracking every dollar you spend. Yes, every dollar! Whether it’s app subscriptions or a quick stop at the drive-thru, write it all down. You can use apps, spreadsheets, or even good old pen and paper. This step is eye-opening and can help you spot patterns or areas where you consistently overspend.
Set Realistic Money Goals
What do you want your budget to do for you? Are you saving up for a trip or tackling debt? Maybe you’re just aiming to have a little extra cushion each month. Whatever it is, define your goals and make them specific. Instead of saying, “I want to save,” go for something like, “I’ll save $250 a month for an emergency fund.” Having specific goals will keep you motivated and focused.
Pick a Budgeting Style That Suits You
There’s no one-size-fits-all budgeting method, so choose something that feels natural for you. Maybe you like the simplicity of the 50/30/20 rule (50% needs, 30% wants, 20% savings). Or maybe zero-based budgeting fits your personality, where every dollar is assigned a job. There’s also the envelope method if you prefer cash-based spending.
Divide Your Money Into Categories
With a budgeting method in mind, start assigning dollar amounts to different categories. How much will you spend on housing? Food? Transportation? Be realistic with your estimates, and make sure your total doesn’t exceed your income. This part might take a couple of tries, so don’t worry if it’s not perfect the first time.
Prepare for the Unexpected
Life happens, and unexpected expenses are bound to pop up. Set aside a small buffer each month—maybe $50 or $100—just in case. This “just in case” fund can cover things like surprise car repairs or last-minute gifts without derailing your entire budget.
Use Tools to Stay on Track
Budgeting is way easier when you’ve got the right tools. Apps like EveryDollar or YNAB are great if you like automation—they sync with your accounts and categorize spending for you. If you’re not an “app person” a spreadsheet is likely all you’ll need. Whatever you choose, the goal is to make staying organized as simple as possible.
Check in Weekly and Adjust
Your budget isn’t supposed to be rigid. Peek at it once a week to see how you’re doing. Overspent on groceries? No big deal—just cut back somewhere else to balance things out. Regular check-ins keep you aware and prevent those “where did all my money go?” moments at the end of the month.
Celebrate and Stay Motivated
Starting is the hardest part, but budgeting gets easier the more you do it. Small steps lead to big changes, and over time, managing your money will feel second nature. You’ve got this—take it one step at a time, and watch your finances start to improve.
13 Surprising Expenses You’re Forgetting to Budget For
Budgeting can feel like a chore, but it’s a key factor in staying financially stable. Even the most detailed budgets can miss hidden expenses that sneak up unexpectedly. These forgotten costs can derail your finances if you’re unprepared, so it’s important to account for them early. Below are some common–yet sneaky–expenses you may be overlooking.
Read it Here: 13 Surprising Expenses You’re Forgetting to Budget For
10 Ways Lifestyle Inflation is Quietly Wrecking Your Budget
Lifestyle inflation, also known as lifestyle creep, happens when your spending rises alongside your income. It’s sneaky. You earn more, so you begin to spend more on things you once considered luxuries. Over time, this can leave you stuck in a financial rut, unable to save or invest for the future. While enjoying the fruits of your hard work is fine, unchecked lifestyle inflation can quietly undermine your financial goals. Here’s how it might be affecting your budget.
Read it Here: 10 Ways Lifestyle Inflation Is Quietly Wrecking Your Budget