The Ultimate Guide On How To Make A Monthly Budget

Ready to start saving money, but need to know how to make a monthly budget first? This guide will provide you with 11 straightforward steps to help you create the perfect monthly budget template. A budget plan template that you can use every month to keep your finances in order. As well as help you have an easy time saving your money.

Learning how to make a monthly budget is one of many healthy money habits that really takes getting your finances in order to the next level.

So much so that it can make tracking your money and saving your money each month incredibly easy!

As someone who has created a monthly budget worksheet that I use monthly, I know how helpful they truly are.

You are going to learn how to create a simple monthly budget template that is very easy to stick to.

That way you too can see just how much you will benefit from having one!

This post is all about the ultimate guide on how to make a monthly budget that will help you save money.

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How To Make A Monthly Budget

Before getting to the good stuff, don’t forget to pin this post so you have an easier time coming back to it at a later time.

How Should A Beginner Start A Budget?

When it comes to being a beginner, the best way to start a budget is to first know about the importance of budgeting.

You then want to get a general idea of what a budget consists of. This is where reviewing budget guides really comes in handy.

Some guides include a personal budget example, while others focus on making monthly budget template Google sheets.

However, a simple budget guide contains all of the must-know information you NEED to start your budgeting journey.

That way, you have an easier time creating your very own budget!

Once you know the basics, you can begin searching for the actual steps to take to create a successful budget.

What Is A Good Monthly Budget?

People will always have different opinions when it comes to this question.

However, I personally believe that a good monthly budget is one that helps you organize your finances. From there, it should then be able to help you reach your money savings goals.

In addition to this, it should contain hardly any common budgeting mistakes.

The more mistakes you have, the less accurate your budget will be! Therefore, holding you back from working towards your list of reasons to save money.

This especially sets you back when you’re trying to use your budget to reach financial independence.

What Is The 50 30 20 Budget Rule?

There are many rules people choose to follow when it comes to budgeting.

One of the most common rules people follow is the 50 30 20 budget rule. This rule basically splits your budget into three main categories.

The first is your mandatory expenses. Here, you will put 50% of your income towards this category. These types of expenses include things like your rent or mortgage, utility bills, groceries, transportation, etc.

The second is your wants. Here, you will put 30% of your income towards this category. This includes things like traveling, dining out, entertainment, clothing, etc.

The third is your savings and debt repayment. Here, you will put 20% of your income towards this category. This includes things like your emergency fund, credit car debt, loans, retirement account, etc.

Though this is just one budget rule to follow, there are of course other great rules worth following!

How Do You Create A Simple Monthly Budget?

Listed down below are the 11 steps in budgeting process that will teach you how to budget money for beginners.

Though this is more of a general guide to budgeting, it is still a great guide to follow when you’re first starting off!

If you want a more in depth guide that contains an actual monthly budget example, then make sure to check out my Incredibly Easy How To Make A Budget Step-By-Step Guide.

1. Gather Your Materials

The very first step in creating a successful budget you can use monthly is to gather all of your materials!

In all honesty, you don’t need to spend a lot of money on an expensive monthly budget app. You also don’t need to waste money on a very pricey budget money planner.

All you really need is a spiral notebook to write in. As well as some pens of varying colors to write out each section of your budget.

If you want to take things a bit further and make very important information stick out, use some highlighters.

The beauty about budgets is that there are SO MANY budget styles out there! So you can really customize yours to your liking.

After getting your materials together, you can then move onto the next step.

2. Identify Your Income

The next thing you need to do is figure out what your monthly income actually is.

If you only have one income, then this will be easy to identify! But if you have multiple incomes, you might need to spend a little bit more time figuring out the total.

For those that get paid salary, simply divide your yearly total by twelve months. This will let you know how much you make per month.

Keep in mind that you will want to know the net income.

If you are completely new to all of this, this basically means your total income after taxes and paycheck deductions.

Once you figure out your monthly net income, write this number out at the top of your budget.

Because this is a very important piece of information that you want to have stand out, highlight it!

3. Figure Out Your Monthly Bills

Not going to lie, this next step can be a bit discouraging. Mostly because it can really suck seeing just how much of your money goes towards paying bills!

Here, you want to figure out what all of your monthly bills are. As well as how much you pay for each one of them.

If I’m being honest, it can sometimes be difficult trying to remember all of your bills in one sitting.

This is why I usually tell people to take as much time as they need to gather all this information. Sometimes it can take a couple of days or so getting this done.

Regardless of how long it takes you, wait until you’re done writing down ALL of your bills! As well as their totals before moving onto the next step.

The reason you want to do this is because you want your budget to be as accurate as possible. The more accurate your information is, the more successful you will be at budgeting and managing money!

Here is a list of common monthly bills to include:

House payment or rent payment
Electric bill
Gas bill
Water bill
Phone bill
Car payment and car insurance
Health insurance
Internet
Childcare
Memberships

After writing down everything, add all of the numbers together to figure out what your monthly total is. You then want to list this number as the ‘final total’ and make sure to highlight this. As this is yet another piece of important information you want to stand out!

4. Determine Left Over Money After Bills

This next step is probably the easiest to do out of all of them!

From here, you want to take the final total of your monthly bills and deduct it from your monthly income.

You will then know how much money you have left after paying off your monthly bills.

If you’re like me and have a great amount of money left over, don’t get TOO excited just yet!

There are going to be a couple of things to consider before figuring out how much of it you can actually spend.

So again, make sure to highlight this number so that you don’t forget about it!

5. Decide A Total To Go Into Your Savings

One of the most important steps, whether you’re making a budget template in your notebook or creating a printable monthly budget template, is to keep your savings in mind!

After all, part of the reason you are making a monthly budget is because you probably want to start saving your money. Maybe not all of it, but at least some of it!

This is where thinking about your future comes into play. You will want to decide how well off you want to be financially.

I’ve said this before, but you never know what financial situations you will come across in the future. For this reason, you want to make saving your money a priority!

To all my beginners out there, I recommend trying to save at least $100 per month. As time goes on and you get better at knowing how to manage finances, increase the amount you save.

This is how I started off and quickly realized this is one of many monthly budgeting tips wealthy people swear by!

Once you decide the total you will be putting into your savings account, deduct this from your total left over money after paying your monthly bills. You can then move onto the next step.

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6. Make A List Of Expected Expenses

Earlier I mentioned figuring out and writing out what your monthly bills are and how much you pay for them.

Other bills to include in your budget are what I like to label as expected expenses.

These are expenses that don’t always occur every month but when they do, you need to be aware of them!

As an example, on my personal budget spreadsheet I include getting my hair and nails done as expected expenses.

I typically get my hair done every 2 to 3 months and my nails done at least once a month.

Since I know when both of these will be happening, I’m able to keep track of them.

As well as put spending money aside for them.

Make sure to group these expenses somewhere on your budget plan worksheet and highlight them! I personally like to put these in a box and highlight the entire thing.

Don’t deduct the total of your expected expenses from anything just yet. I will come back to these a little bit later.

7. Split Up Leftover Spending Money

After deducting the total of your monthly bills and the total of how much money to save from your income, you should then be left over with your actual spending money.

This is going to be the money that you can basically spend on whatever it is you want!

After all, you work hard for your money so you should be able to spend it. Keep in mind though that you still want to be conscious of your spending. Which is why it is important to learn how to balance a budget.

Don’t worry though because as time goes on and with practice, you will get better at managing money!

From here, you want to figure out how much money you can spend per week, as well as per day.

To find out your weekly spending limit, take your leftover spending money and simply divide it by 4 weeks.

You will then take that total number and divide it by 7 days. This is so that you can see what your spending limit is per day.

Trust me when I say that this will make keeping yourself on track way easier!

Wherever it is that you place these totals on your budget, make sure to highlight these very important numbers.

8. List Out Weekly And Daily Spending Limit

Now, you will want to list out your weekly and daily spending limit somewhere on your phone.

Depending on the type of phone you have, you should be able to find some sort of free app that allows you to jot down notes.

I have an iPhone so I just go in my ‘Notes’ app, open up a new note, and label it ‘Monthly Budget’. This is where I list out both of my spending limits.

The biggest reason I love the Notes app is because it is completely free! Which means no need to spend money on pricey budget apps. So think of the Notes app as one of the best free budget apps!

Though not technically a budgeting app, you get what I mean.

This is how to track spending easily no matter where you are in the world! In the next step, I’ll go over how exactly you will be able to track your spending.

9. Revisit Expected Expenses

Referring back to the Notes app, in addition to listing your weekly and daily spending limit, you will also want to put your leftover spending money at the very top.

Again, this is money you will be able to spend on whatever you want.

As well as your expected expenses for the month. If you happen to have the total cost of these, great! If not, don’t worry too much about it.

The reason for this is because depending on the expense, the total might not always be the same.

Going back to the getting my nails done example, during certain months I only get a manicure. Other months I get both a manicure and a pedicure. But it’s not until I go to pay that I will for sure know the exact total.

Since I always list this as an expected expense, I know I’ll eventually need to pay for this.

So I always keep this in mind when making other purchases that don’t necessarily fall under the expected expenses category.

As you spend your money, make sure to always keep your expected expenses in mind!

10. Track Your Spending

When it comes to tracking your spending, the calculator app on your phone will become your new best friend!

Think of this calculator as a monthly budget calculator that will make tracking super easy!

Any time you make a purchase, all you need to do is put in your current leftover spending money in the calculator app, subtract the total of the purchase you just made, and then update your Notes app with whatever the new total is.

This is how you track all of your spending and keep your leftover spending money up to date!

Because you most likely carry your phone everywhere you go, making updates will only take a couple of minutes.

As a side note, having your weekly and daily spending limits listed lets you know if you’re spending a little too much money and need to slow down. Or if you are doing just fine and keeping on track.

11. Review The End Result

At the end of the month, you need to review the results to see how well you did. As well as make sure your budget is actually working.

The best way to do this is to figure out how much money you were able to save at the end of the month.

This is why it is very important to have savings goals in place! Whether you have just one money savings goal or multiple, make sure you have them.

If you were able to reach your goal, then you are good to go! If you didn’t, then this is where you can see what changes you can make.

One of the top changes to make is trying to find ways to reduce how much money you spend. Spending less means more money that will be able to go towards your savings.

As your savings increases, the bigger your financial cushion will be and the closer to financial freedom you will be!

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This post was all about how to make a monthly budget that gets your finances in order so you can easily save money.

Whether you’re searching for how to create a budget spreadsheet or how to budget money on low income, you now know how to make a monthly budget.

After creating your own and making changes to it as time goes by, you will understand just how powerful a budget can be!

So much so that you will NEVER want to go a month without using your budget.

Make sure to use the steps above to get things going and work towards creating your perfect budget!

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

The Ultimate Guide On How To Make A Monthly Budget