Creating a budget doesn’t have to be complicated. A good budget simply helps you plan how you’ll spend and save your money — without feeling restricted. Whether you prefer apps, spreadsheets, or pencil and paper, the basic steps are the same.
Start with your take-home pay from your job, side hustle, or freelance gigs. Include any regular income sources like rental income or support payments.
Break your expenses into categories like:
Subtract your expenses from your income. If your expenses are higher, look for areas to cut back. If you have extra left over, allocate it toward savings, debt payoff, or your financial goals.
Your income and expenses may change month to month. Check your budget regularly and adjust categories as life happens. Flexibility is key.
Let’s say Emily earns $3,500 per month after taxes. Her fixed expenses total $2,200, and her variable expenses (groceries, gas, entertainment) are around $800. She allocates the remaining $500 toward savings and debt payments.
Want to skip the math? Use our free Budget Planner Calculator to quickly build your own monthly plan and adjust your spending categories as needed.
For beginner budgeting tips, check out the CFPB's budgeting guide.