How To Make a Budget For Beginners [Guide]

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Learning how to make a budget and stick to it is an essential life skill. There are a few key steps to creating a budget that can work for you. What do you hope to achieve financially? Do you want to save for a down payment on a house? Are you looking to get out of credit card debt? Are you saving for your dream wedding? Once you have established your goals, you can start to allocate your money accordingly. Then, review your budget every month and make adjustments as necessary. By following these simple steps, you can take control of your finances and create a brighter future for yourself.

Budgets can be a drag, but they don’t have to be! A lot of people either don’t have a budget at all or struggle to stick to their budget.

If that sounds like you, then I encourage you to read all the way through to the end of this post.

As you can see in this article, Americans have a huge mountain of credit card debt, and it continues to climb year after year.

Furthermore, in this Money Talks study, they found that over 6 in 10 Americans don’t talk about money!

Some of the main reasons for this are:

  • They never talked about finances growing up
  • They learned it’s not “polite” to talk about money
  • They were taught to never ask someone how much money they make

Everyone should know how to budget without it being a painstaking task…

Unlike reverse parallel parking in front of an audience! No?? Just me???

And if you have debt, it’s even more important to have a financial plan so you can slay that debt once and for all.

There’s no need to overcomplicate things when it comes to putting together your budget.

If it’s too complex or complicated, it’s destined to fail.

Stay tuned, because I have something later on in this post that I think you’ll find really useful! Consider it a gift :)


We’ve all been there. You sit down to finally budget out your expenses for the month, and you’re feeling good! You’re being proactive, you’re taking control of your finances! Go you!

But then you realize just how much money you spend on things you don’t really need, and you start to get restrictive with your budget. You cut out all of your “fun money” and allocate every last dollar to bills and other boring but necessary expenses. And then you feel guilty every time you spend a dollar on something that isn’t absolutely necessary.

This kind of restrictive budgeting is ineffective and can often lead to budget burnout.

When you’re too restrictive with your budget, it’s easy to fall off the wagon and go back to bad money habits. But when you allow yourself a bit of wiggle room, you’re more likely to stick to your budget in the long run. So don’t be too hard on yourself when it comes to budgeting. Allow yourself some breathing room, and be realistic about what you can and can’t afford.

Your budget should be working for you, not you working for it!!

Follow these 5 simple steps to create a budget that you can actually stick to.

Be sure to PIN THIS and save this post to your Budgeting and Money Pinterest Boards. That way you can refer back to it whenever you need to work on creating your budget!


Before you even think about starting a budget, you need to know what goals you’re trying to meet.

The best way to establish your goals is by asking yourself what your short-term and long-term goals are.

Do you have debt you want to get rid of for good?

Are you sick of living paycheck to paycheck and want more money left over at the end of your pay cycles?

Or maybe you want to save a deposit for your first home. Perhaps you even want to earn enough and save for early retirement and travel the world (doesn’t everybody?!)

Whatever your goals may be, write them down or put them into a spreadsheet. These will be good to refer back to when you need reminding of the importance of sticking to your budget.

According to a poll that was taken by more than 1,000 Americans on their budgeting and spending habits, here are some reasons why people don’t like to budget their finances.


If you can relate to any of these reasons, this is all the more reason why you should have a budget. Start with your goals, then move onto the next step.


There are different types of budgets to suit different types of people and their needs. So it’s important to find one that fits your unique circumstances.

No matter what type of budgeting system you choose, the key is to find one that works for you and that you can stick with. So take some time to explore your options and find a budgeting system that will help you get to where you want to be.

Let’s look at some of the most popular budgeting methods below.


If you’re someone who likes to be in control of every single penny, a zero-based budget may be right for you. This type of budget starts with each dollar being allocated to a specific category, and all spending must be approved in advance.

For example, your money is allocated to food expenses, debt payments, bills, savings account etc.

After you’ve allocated your income (inflows) to your savings and expenses (outflows), these need to match up by the end of your pay cycle. This way, you’re living well within your means and keeping track of every dollar you spend.

When you’re budgeting using a planner, you’re spending with intent and staying on top of your spending.

So if you want total control of your money and you like to plan ahead for your expenses, knowing exactly where your money is going, then the zero-based budget could be perfect for you.


If you’re more spontaneous with your spending, a cash only budget may work better for you. With this system, you withdraw a set amount of cash for each category at the beginning of the month and only spend what’s available.

To get started, write down your budgeting categories onto separate envelopes like groceries, hair appointments, dining out etc. Put an amount into each envelope for each item and that’s what you’ve got to spend on those categories for the month.

When it comes to paying for each item you’ve allocated cash for, you’ll take the cash in envelope out with you to pay for them.

Once it runs out, you’ve reached your spending limit for that category and will need to wait until the following month.

This method has been around for ages and it’s a very effective way to make sure you’re not overspending.

It’s simple but it works because you can’t just tap your card away with dozens of small purchases each week. Which can easily lead to overspending.

THE 50/30/20 BUDGET

One of the biggest mistakes people make when it comes to budgeting is setting unrealistic goals. If your budget only allows for $50 of discretionary spending per month (as an example), it’s not realistic to expect that you’ll never go over that amount.

Instead of setting yourself up for failure, try to give yourself some spending room. If you’re always depriving yourself, you’re much more likely to give up on your budget altogether. It’s important to still enjoy your life while you’re on a budget.

The 50/30/20 budget is all about balance and it’s a popular budgeting method because it allows room for some fun too.

The idea behind this budgeting rule is all about balancing your needs, wants and savings. This way it allows you to save without being too strict.

So how does it work?

First, put 50% of your paycheck towards your needs. Things like housing payments, food costs, health insurance and transport.

Second, put 30% of your paycheck towards your wants. These might be monthly subscription costs, eating out, cinema etc.

Finally, put 20% of your paycheck towards your savings and any debt repayments. This includes building your emergency fund and 401(k) contributions.


A lot of people feel there’s nothing left from their paycheck for fun or unexpected expenses. This can be super frustrating and make it seem like traditional budgeting methods just don’t work.

But everyone’s financial situation is different.

Just because one method doesn’t work for someone else doesn’t mean it can’t work for you. There are a lot of different ways to save money. And so it might take some trial and error to find the method that works best for you.

The reverse budget method focuses on paying yourself first.

With this approach, you build your spending plan around your savings goals, rather than focusing on fixed and variable expenses. This means your savings become a priority, but you still have enough money to cover necessary expenses like housing, utilities and insurance.

The key is to automate your savings plan so that you’re automatically transferring a fixed amount of money into your savings account each month. This way, you won’t see the money, and it will slowly start to add up over time.

Paying yourself first is a simple but effective way to jumpstart your savings and get on the path to financial security.

If you’re new to budgeting it can be tempting to throw this task into the “too hard” basket.

During my own budgeting journey I found myself scribbling down on bits of paper and constantly losing them, which was less than ideal…

So, I got to work and created some budgeting sheets I could print and keep together in the one place to help me budget every month, which made life a whole lot easier!

I promised you a gift that I think you’ll find really useful and that will help you get started with budgeting.


Here are my exact budgeting sheets that helped me stay on top of my finances, track my money and save thousands of dollars over the years.

These are completely free for you to download and use!


This next step involves adding up all of your income, including your partner or spouse’s. Make sure you’re adding this up after tax ie. net income.

Be sure to include everything from your work paycheck, any benefits you receive, money earned on the side etc.

A lot of companies offer their employees the option to take part in the 401(k) plan. This plan is essentially a retirement savings plan.

The way it works is you make contributions towards your 401(k) account and your employer will match part or all of your contribution amount. This is an easy way to get (essentially) free money, so don’t skip over an opportunity like this one.

While you’re working towards your savings goals, include any money you are contributing to your 401(k) account. Are you earning any money on the side with a small business or side hustle? Make sure you include that as part of your total income.

Finding ways to make extra money and boost your income can help bring more flexibility to your budget!

👉 One of my favorite and top recommendations for earning extra income is through blogging.

I started this blog as a way to ultimately escape my 9-5 in an office which was no longer working for me.

After a lot of research and looking at my financial situation I decided to start this blog so my readers could follow along with my financial journey and learn how to earn an income online. If you’re interested in learning about how to start a blog, then you can check out my post How To Start a Profitable Blog Step-By-Step. Blogging has changed my life and given me a purpose outside the office grind!

With the extra money you make with blogging, this can give you more room to move within your budget and allow more freedom for the things you enjoy doing.


Do you constantly wonder how your bank account suddenly got to a low and worrisome level? It’s like money just disappears into thin air!

How does this happen??

And more importantly how can we stop it from happening over and over again!

I’m going to show you how.

You’ll need to take a look at the past few months’ transactions to see where your money is going. Download your credit card and banking statements for the previous 3 months and put all your expenses into categories like housing, car and transport, groceries, utilities, events etc. Making sure you’re not missing any small costs like coffee, treats and the like.

By taking the time to do this, you’ll be able to see what you’re unnecessarily spending your money on.

This step was a real eye-opener for me and my husband! We realized how much money we were wasting on things we didn’t need. It was no wonder we weren’t saving much!

You don’t need to be too hard on yourself with your spending, but just be mindful of what you’re buying and why. Take a look at where changes need to be made and where you can cut back on certain things.


Now that you’ve set up your budget, it’s time to assess your situation. Budgeting is pointless if you don’t keep track of overspending in areas like food and entertainment, for example.

When I first started budgeting as a beginner, I began reviewing my budget daily, then weekly and finally moved to monthly tracking. You may want to do the same or you may find that weekly or monthly is enough. The idea is to stay on top of your money and know EXACTLY where it’s going and when.

Of course nothing is concrete either. If you find your budget isn’t working for you after a month or two, you can move things around.

It’s about finding that sweet spot so you’re not a slave to your budget where you can’t have any fun, but you’re not overspending in areas that could go towards your savings instead. This may take some time getting used to what works for you personally.


When it comes to creating a budget, there’s no one-size-fits-all approach. Just because your best friend swears by the envelope system doesn’t mean it will work for you. And that’s OK!

The most important thing is to find a system that works for you and your unique financial situation.

Just remember to keep track of all your income and expenses each month. Once you have a handle on your monthly cash flow, you can start to develop a budget that makes sense for you.

Ultimately, the best budget for you is the one that meets your needs and helps you reach your financial goals. So don’t be afraid to experiment until you find a system that works for you!

Always keep in mind that a budget should be working for you, not you working for it. 🙂

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