Incredibly Easy How To Make A Budget Step-By-Step Guide

Want to know how to make a budget that doesn’t require a bunch of complicated steps? This step-by-step guide shows you what you need to create a successful budget. There will even be an easy to follow budget example so that you can see just how simple it is.

Starting a budget can seem difficult when you don’t know where to begin.

When searching how to budget money for beginners, it became overwhelming for you with all the information being provided.

As someone who knows what that feels like, I am giving you an easy step-by-step guide.

You are going to learn how to make a budget that you can stick to for years to come.

Once you know what steps to take, managing your money won’t seem impossible. In fact, you will become an expert at it.

This post is all about a how to make a budget guide every beginner should know about.

This post may contain affiliate links, which means I may receive a commission at no extra cost to you, if you make a purchase through a link. Please view the full disclosure for more information.

How To Make A Budget Step-By-Step Guide

If you’re looking for a simple budget guide to follow, then you’ve come to the right place.

Sometimes simply reading text alone isn’t enough. I’m sure my visual learners out there will agree.

Being able to see a picture of each step being taken can help tremendously.

As you read along, you’ll see plenty of pictures that help you understand what is going on.

Printable Worksheets

I created printable worksheets for you to have as you follow along. These worksheets make it so you don’t have to learn how to make a budget in excel.

Each budget plan worksheet makes it easy for you to plug in your information.

As you go through each step, you’ll get a better idea on what and where to plug your numbers in.

So before you read ahead, make sure to have them on hand.

Disclaimer: I do want to make a disclaimer and mention that I am not a financial advisor. The information in this post is for information purposes only. It is not intended to be financial advice. Users should seek professional advice before acting on it. Please view our full disclosure for more information.

That being said, these printables are what I use to help me continue to have a budget that works.

I’ve even shared these with a few close friends. This has helped them get a better idea of where to start and what to do.

Budget Example

I’ll be giving a brief description of the personal budget example I’ll be using.

This makes it easier for you to know where I got my numbers from. It also makes it easy for you to know where to plug in your information.

Jasmine The Certified Medical Assistant

Jasmine is a single, 25 year old woman, who works as a certified medical assistant. She gets paid bi-weekly and makes $1,800.00 each paycheck. This is after taxes and insurance premiums have been deducted.

For reference, her employer pays a good amount of her insurance. She pays $50 for medical insurance, $10 for dental, and $5 for vision each paycheck.

When it comes to retirement, she has a 401(k) where she puts in 15% of her paycheck.

She rents a one bedroom apartment and pays $1,100.00 each month.

When it comes to her utilities, she is responsible for electric and gas. Her landlord takes care of the water and trash.

She is also in charge of paying her own internet in which she pays $50.00.

When it comes to her phone bill, she has an unlimited plan that she pays $70.00 for.

Because she works a 9-5 job, she usually only goes out during the weekends. She will sometimes dine out a couple of times during the week. This is to avoid having to cook on the daily.

For entertainment, she enjoys reading, painting, and watching the occasional show or movie on Hulu. Her Hulu subscription comes out to $18.00.

She drives a 2015 Toyota Camry that is already paid off but still pays for car insurance. This comes out to $100 a month.

Twice a month, she enjoys going to the salon to get her nails done.

She enjoys traveling and is currently saving money for an upcoming vacation to Cancun.

Once a week, she buys only the groceries she will be eating for that week. This helps her avoid being wasteful when it comes to food as well as money.

How To Make A Monthly Budget

Now that you have an overview of where we will be getting our numbers from, everything will make sense.

1. Start With Your Income

Always begin with writing down your income. Make sure to include all streams of income.

Here, we will be filling out the ‘Monthly Budget Planner’.

Before filling out the worksheet, we need to remember that 15% of Jasmine’s $1,800.00 paycheck goes into her 401(k). This equals out to $270.00, which leaves her with $1,530.00.

Since she earns two paychecks a month, we want to multiply her leftover money by 2.

Her income then comes out to $3,060.00 for the month.

That’s the number we will use to fill out the space next to ‘Source 1’. We will also input this number next to ‘Total’.

This is because this is Jasmine’s only form of income.

2. List Your Expenses

Next, gather all of your expenses. Make sure to have the exact number you pay for each expense.

We are now going to list Jasmine’s fixed expenses as well as the total that she pays.

Now remember, fixed expenses are ones that don’t change and in this case, get paid every month.

Jasmine’s fixed expenses are as follows:

Rent: $1,100.00
Internet: $50.00
Phone bill: $70.00
Hulu Subscription: $18.00
Car insurance: $100.00

These are the numbers we will be plugging under the ‘Bills’ category.

Once all fixed expenses are listed, add them up. After adding everything up, the total comes out to $1,338.00.

This is the number that will go in as the ‘Total’.

As a side note, medical, dental, and vision are not included in this list. This is because those expenses are deducted before her paycheck gets deposited.

Following fixed expenses, are variable expenses. As a reminder, these type fluctuate in cost.

There might even be some that don’t occur every month.

In Jasmine’s case, her variable expenses are as listed:

Electric bill
Gas bill
Groceries
Dining Out
Getting nails done
Traveling

This is where things get a bit odd. We’re going to list all of these under ‘Variable Expenses’ but not include an amount or total.

I’ll come back to this a little later when I go over how to track spending.

3. Figure Out Your Leftover Money After Bills Are Paid

After you pay off all expenses, you then want to know how much money is leftover.

In Jasmine’s case, we’ll be taking her total income of $3,060 and deducting her total for bills which is $1,338.00.

As you can see, her money leftover is $1,722.00.

4. Decide How Much Money You Want To Save

Once you know how much money you have left, you need to decide how much to save.

When deciding, make sure to go over your reasons to save money and be realistic.

Jasmine plans to take a vacation to Cancun so keep this in mind. Some other things to keep in mind are unexpected expenses such as:

Medical emergencies
Car repairs
Tax increases
Gifts and special occasions
Increase in seasonal expenses

She also needs money to spend on whatever she wants so she needs to be reasonable.

Jasmine is going to expect to save at least $600.

We’ll now take her money leftover amount of $1,722.00 and deduct expected savings of $600.00. Her leftover spending money comes out to $1,122.00.

This is what she’ll be able to spend for the month on whatever her heart desires.

5. Determine Your Spending Limit Per Week And Day

After knowing how much money you can spend on whatever, you need a way to stay within your limits.

You’ll first want to know your spending limit for the week. Followed by knowing your spending limit for the day.

We’ll now first figure out Jasmine’s spending limit for the week. Most months contain four weeks, so we’ll take $1,122.00 and divide it by four.

This comes out to $280.50 as her spending limit per week.

Now, we’ll figure out her spending limit per day. One week contains seven days so we’re going to divide $280.50 by seven.

This comes out to roughly $40.07 as her spending limit per day.

Jasmine will need to keep these limits in mind as she makes purchases.

It’s one thing to know how to create a budget. But it’s another knowing how to create a budget and stick to it.

How To Keep Track Of Spending

You’ll know if your budget is working by tracking how much you spend. Tracking your spending is a budgeting tip that you should never forget.

As it is part of what determines if your budget will be successful or not.

Now that we know Jasmine’s spending limits, we’re going to create a way to track her spending. This is to make sure she doesn’t go over her limit and still hits her goal of saving $600.00.

Tools To Use As A Budget Tracker

This is where the ‘Monthly Expense Tracker’ printable comes in handy.

This printable paired with the calculator and notes app on your phone will make tracking very easy.

These three tools make it so that you don’t need to invest in a budget app or budget calculator.

First, open up the notes app and create a new note.

Then, title it “Spending Money Left For _______”. Enter the month we are in inside the blank, followed by your total spending limit.

Also include your spending limit per week and day so you don’t forget them.

In Jasmine’s case, we’re going to enter her total spending limit as $1,122.00. We will also enter her limit per week as $280.50 and limit per day as $40.07.

Revisiting Variable Expenses

Remember earlier when I said I would come back to the variable expenses? Well I’m coming back to it in this section.

In your notes app, type out your list of variable expenses.

In Jasmine’s case, we will type out the following:

Electric bill
Gas bill
Groceries
Dining out
Hobbies
Traveling
Getting nails done

spending money left and variable expenses

There is a reason we didn’t enter these in the ‘Monthly Budget Planner’.

This is because it is difficult to know the exact amount until we go to actually pay for these expenses.

As an example, think of your electric bill.

You might get notifications estimating what your total will be. It isn’t until the actual amount gets posted that you’ll know exactly how much to pay.

In Jasmine’s case, think of her nails.

There might be a time where she wants to switch things up and ends up paying more than her usual. There might even be times where she skips out on getting her nails done for the whole month.

Knowing this, you still want to have your variable expenses listed.

This is so that they are always kept in mind when it comes to spending money.

Documenting Purchases

From here, you will enter any purchase made in the ‘Monthly Expense Tracker’.

You will also mark if you paid using cash or credit, the amount paid, and date of purchase.

In Jasmine’s case, here is a list of her variable expenses for the month:

This will be how you look back at all of your purchases made for the month.

Every time you list a purchase, you are then going to open up the Notes app. Here, you’re going to deduct the amount from your total spending limit at the top.

This will be a sort of live way to know how much spending money you have left.

This is very important because it will make you aware of two things.

The first is if you’re getting close to approaching a balance of $0. The second is if you have a long way to go before reaching your spending limit.

As you continue to track your spending each month, checking your notes app will become second nature to you. This will help you determine if making a certain purchase is worth it.

Constantly practicing this habit is what will eventually make you financially responsible.

How Can You Evaluate Whether Your Budget Is Working Or Not?

Now that you know how to create a budget and track your spending, there is one last important step.

That is to make sure it is actually working in helping you save money.

This is where the ‘Monthly Savings Tracker’ printable comes in handy. By the time this is filled out, you’ll see how easy it is to see if your budget is working.

When the month begins, enter the amount in your checking and savings account under ‘Start Of The Month’. Then add them up.

In Jasmine’s case, she only has one of each account. In her checking account she has $2,500.00 and $9,000.00 in her savings.

Once that’s filled out, we can see that her total combined at the start of the month comes to $11,500.00.

When the month is over, you will then be filling out the ‘End Of The Month’ portion.

Enter the amount in your checking and savings account then add them up.

In Jasmine’s case, she finished the month with $2,770.00 in her checking account and $9,130.00 in her savings account.

Her total saved comes out to $11,900.00.

Now, we’re going to enter $11,900.00 next to ‘End Of Month Total Combined’. Then we’ll enter $11,500.00 next to ‘Start Of Month Total Combined’.

Once you subtract, you can see that the difference is $400.00.

This is what shows you the final results.

Though Jasmine didn’t hit her goal of saving $600.00, she still did great by saving $400.00.

From here, it is easy to figure out what changes to make the following month to hopefully hit her goal.

A great place to start is with her expenses. The more she is able to reduce her expenses, the more money she will save.

Related:

This post was all about how to make a budget step-by-step guide.

You now know how to create a budget, keep track of spending, and see if your budget is working.

When creating these printables, I wanted to include the exact templates I personally use as they truly do work.

I also wanted to make it easy for you to fill them out as you followed along the example.

One thing to keep in mind is don’t give up if things don’t go as planned the first time around.

Eventually you will get the hang of things and budgeting will become easier.

You will then be able to accomplish your financial goals with ease.

That being said, good luck and I wish you nothing but the best on your journey.

If you found even the tiniest bit of information from this post helpful, just know that it was made simply for you.

Incredibly Easy How To Make A Budget Step-By-Step Guide