Budgeting The Blog

Build A Budget in 3 Easy Steps

Use these quick and easy steps to build a budget that you can actually stick too!

Disclaimer: In the name of full transparency, please be aware that this blog post contains affiliate links and any purchases made through such links will result in a small commission for me (at no extra cost for you). As an Amazon Associate I earn from qualifying purchases. I am not a finance expert. Anything written here are just personal experiences and my own opinions.

Step 1: Choose your budget categories to start to build a budget

First, you need to figure out what categories you want to include to be able to build a budget. Check out my full list of budget categories and come back here to move on to step 2!

In summary, you should review your last month of finances and determine where you spend your money. Then, compare that to my list and choose your categories!

Step 2: Fill out a budgeting spreadsheet or use Mint to allocate funds to your budget categories

Next, now that you have chosen your categories you want to start determining how much you need to allocate to each category to start to build a budget.

How to break it down

Have you heard of the 50-30-20 rule? If not, let me explain, if so, skip on down to the next paragraph to see my take on it. So, the 50-30-20 rule is a popular one in personal finance and gives you a guidepost for how much to spend on different expenses in your life. This rule says you should allocate 50% to the necessities (rent, gas, groceries, utilities, etc.) Then, 30% of your income should go to things that you want, and finally, 20% should be put into savings.

Although, I think this rule is a very helpful guideline, I flip those last two allocations. Instead, I try to put about 30% in savings and then have around 20% left for “spending money.” You can see my exact percentage breakdown below. Now, this is just what I do because I am really focused on building up my savings for some future goals. My “spending money” category encompasses anything outside of the basic necessities of food, shelter, insurance, phone/internet, and utilities.

Build a budget: actually write it out

Next, you need to write out your budget. My personal favorite way to do this is by using the Mint app. You can link your accounts to the app so that the purchases are automatically added for tracking. So all you have to do is set up your monthly budget and then go in the app and make sure it has categorized your purchases accurately (you can always change them if not). This will keep you up to date on your spending and lets you know exactly how much you have left to spend.

If you prefer not to use an app, or if you just want to work it out on paper first, and then translate it check out my free budget planner printable by subscribing below or use this cute budgeting journal workbook!

I have included a breakdown of how I separate out my expenses for your reference. Personally, I like to keep the groups to a minimum when it comes to my “fun” money (you know, eating out, new clothes, my morning coffee). So I put that all together in my “spending money” category. That is the great thing about Mint, you can create your own categories if you need it!

As you can see, I am not exactly fitting into the 50-30-20 rule, but am close. Remember, this is just a guideline and you need to make your budget work for you. So use this as a jumping off point.

Step 3: Track your expenses!

Finally, the last step! You now have figured out what categories you need. You have allocated the percentages (and we’ll say you took that a step further to do the math and get the dollar amounts based on your take home pay – if not, you can do that now). So, what’s left? Tracking your spending so you stay in budget!

If you are using Mint, it will do this for you. Your job is to make sure everything and I mean EVERYTHING is tracked and that it is attributed correctly. I personally check my app at least once a day. I would say the minimum is weekly so that you can curb your spending if you are getting too close to your limit. A technique I use is to divide my spending money over the number of days in the month. That was I know how much I have to spend each day. That way I can mentally check in with myself if one day I spend $100, but the daily amount comes our to $30 dollars, I know I need to cool it for a couple of days.

If you are using the workbook, make sure you are going in weekly and adding those expenses so you know how much you truly have left. I think the above tip about the daily spend is even more valuable in this scenario as you won’t have that automated reminder.

So, there you have it! 3 easy steps to build a budget! I know you can do this! You will be on your way to mastering your budget in no time. Just remember, this is a marathon, not a sprint and practice makes perfect (wow, going for the clichés today). Honestly though, money management takes disciple and practice. Give yourself some grace as you work through this.

As always, happy penny-pinching and check out some of my other money management techniques here and don’t forget to subscribe below to stay up to date on all the tips and tricks!

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