How to Make a Budget for Beginners

Last week, we talked about the basics of personal finance. You were able to get more comfortable with the idea and become more financially literate. That is amazing because I know first hand how big of a step that is! It takes true inner strength to commit to working on your finances. But don’t worry, I’m here to help however I can! And yes you can message me with questions if you haven’t already! Particularly once you read this post about how to make a budget!

At this point, you’ve read through all the points and decided to make some changes. If you thought you could jump right in without making a plan, well, you’re wrong. But that doesn’t mean that making a well structured financial plan has to be hard! Or even boring for that matter. And the best part is you don’t have to follow someone else’s plan. You get to make one specifically for you and your needs.

make a budget and stick to it

How to Make a Budget

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First, let’s consider what we discussed in my last post. As I mentioned, the role of budgeting is to widen the gap between what you earned and what you spent. That is why budgeting is key to becoming financially stable. It prevents you from living paycheck to paycheck. Not to mention, you finally get to break free from the vicious cycle of overworking yourself… Only to barely scrape by with absolutely nothing leftover to show for it.

To begin, you have to commit to changing your mindset. Just because there is a penny in your pocket, that does not mean you have to spend it. There is no point in creating a budget if you’re only going to continue those same behaviors. I’m not saying you have to be perfect from day one – or at all. We all make mistakes and have hiccups from time to time. Myself included. But you must decide for yourself that you want to change your financial situation and work at it everyday.

putting coins in a piggy bank for a budget

First Things First

Before you even begin making a plan, I want you to look at your finances. Pull up your bank app and look at every transaction for the last 30 days. Print it out if you need to. Sometimes seeing it on paper makes it more real. I want you to go through it line by line. Add up exactly how much you earned for that month. Then, add up how much you spent. Does it hurt? It did the first time I did this, too. Which is precisely why I budget every month!


Now, I want you to look at your income. Is there any way you could increase that? A raise or a second job, maybe? I’m not saying you have to work every waking hour. The point is not to exhaust yourself. Just consider if there is a way that you can increase your monthly income. Bonus points if you find more than one way to increase your income!

Necessary Expenditures

Then, I want you to look at your expenses. This may be the hardest part because you’re forced to confront your own behavior. The easiest way to go about this in my opinion is to split your expenditures into categories. I like to do it by: groceries, bills, housing, transportation, and any other essential expenses. Consider if any of these items could be reduced.

Unnecessary Expenditures

After that, look at what’s left. Those are all the things you didn’t have to spend money on. This isn’t to say that you can never spend money on things you want again. But when you first create a budget, the best place to reduce spending is in the unnecessary expenditures. For example, instead of eating out three times a week, cut back to one. Try to lower the amount of times you shop online each month. Maybe decrease how many times you visit Dunkin for breakfast.

Okay, Now What About the Budget?

Now, you’ve started to look at those numbers. You can finally see what you really spend each month. All those trips to Target, drive thru coffees, margarita nights, and online shopping sprees add up. (Unfortunately.) But just looking at it and realizing you should cut back isn’t enough. You need to set goals. Albeit, realistic goals. 

I’m not one to tell anybody how much money they can make. I truly do not believe in limiting yourself – or others for that matter. But if you made $8,000 last month and haven’t done something drastically different, then I don’t think you’re going to make $100,000 next month. So please don’t make that your goal.

Likewise, your expenses also need to be realistic. If your rent is at least $1,500 per month, then your housing budget cannot be $1,000. Unless of course you find a cheaper place to rent. In that case, you’re doing a great job! Simply make sure all of your expenses are budgeted for in a realistic manner for your financial situation.

This is Too Much for a Budget

Trust me, I get it. It takes time to sit down and create all of this. You have to go through line by line. Decide what is a need and what is a want. Then, categorize it all. Not to mention, coming up with the numbers for your budget.

If you’re struggling with this or just want a cute way to write it all out, I created a fun template just for you! It’s completely free and available in my Google Drive, so go download it if you want a guide to help you out!

Grab your free 2021 Financial Binder with 13 pages of useful templates here.

Some other great resources I’ve been using include:

The Best Part About Budgeting?

The best part of making a budget is this… The first time is the hardest. After that, it gets significantly easier! You’ll become more cognizant of your behaviors. You will find your weaknesses. And you can even learn your strengths. (Yes, you’ll have those!) Which are all important for tackling your financial situation! And I know you can succeed at this as long as you’re willing to try!

The more consistent you are with your budget, the easier it gets. Create one at the beginning of every month. Then check the results at the end of each month. How did you do? Can you tweak anything? Maybe you spent way less on certain categories that you didn’t expect. But may be you spent much more on other areas of your budget. 

The great thing about this is that it’s all yours. You can change the numbers to fit your life. And you can change it every single month if you need to! As long as you create your budget to reach your goals, you can do no wrong. All you have to do is try. And do what works best for your situation.

how to make a budget simple steps for beginners

Is There More?

Nope! Now that you’ve got everything you need to create your budget, what are you waiting for? Go, Go, Go!

If you have any questions or tips for us, please comment below! We’d love to hear from you!

3 thoughts on “How to Make a Budget for Beginners”

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