If you’ve read any personal finance advice, you know there’s one simple rule that comes up time and again: You need a budget. Budgets assign your money a job and establish spending limits for specific expenditures so you can use your money responsibly.

Making a budget isn’t as terrible (or boring) as it sounds. It can be done in as little as an hour or two, and it only requires basic math.

So grap yourself a cup of coffee and follow these six steps to make your budget:


Log in to your bank account online, and grab your last couple months’ worth of bank statements.

Write down your monthly income – Take home pay and any other side hustle income.


Exporting your statements to a spreadsheet or using highlighters on printed statements can help you see patterns in your income and spending habits.


Your next step is the painful part: It’s time to log your monthly expenses.

Start with the recurring monthly expenses, which may include:

  • Your rent,rates or mortgage
  • Car payment
  • Car insurance
  • Cell phone bill Internet and other monthly subscriptions (think: Netflix and Showmax)
  • Utilities
  • Debt payments

Don’t forget to include non-monthly but recurring expenses, like the following:

  • Vehicle registration fees
  • Professional association dues
  • Annual subscription renewals

From here, you’ll want to start adding up your discretionary expenses. Analyze your spending habits. How much are you spending on shopping, eating out and coffee with friends?

To get a full picture, you can put these things in categories. Example: Fitness, Entertainment etc.


Add up all of your expenses, and then subtract them from your total monthly income. Hopefully, your income will be more than your expenses. If they aren’t, it’s time to do some adjusting! Taking a deeper look at your small expenses can help you re-evaluate overspending. Those daily coffees or snacks can add up! The goal is for your total monthly income to exceed your expenses.


What are you hoping to accomplish with your budget?Creating specific goals with deadlines can help you benchmark your progress along the way. Here are some financial goal examples:

  • Saving for retirement
  • Building an emergency fund
  • Buying a house
  • Purchasing a new vehicle in cash
  • Paying off debt
  • Saving for college
  • Saving for a vacation or other big purchases

And remember: If you fall off at some point, that’s OK. The important part is picking right back up where you left off.

To download the SMART Goal setting worksheet. Click HERE.


Once you have a complete picture of your finances, it’s time to pick the budgeting method that works best for you. Budgeting methods will differ from person to person.

Some Budget Methods available are:

  • 50/30/20 Budget
  • Cash Envelope System
  • Bare Bones Budget
  • Zero Based Budget


Just as budgeting methods differ from person to person so does a budgeting style. Its almost like fashion. Two people can never have the same way of dressing even if they wear the same clothing bought at the same value.

Similarly find whats comfortable for you when working with your finances and money. Budgeting styles available are:

  • The traditional pen and paper method (my favorite!)
  • Excel spreadsheets
  • Budgeting apps

Do Not let setbacks discourage you from budgeting. The first month that you set up your budget you will forget to categorize certain things. That’s OKAY. Each month you get more and more familiar with your budget. Remember – development takes time.

Need help setting up your budget and staying motivated? Contact me for my budget worksheets. A step by step guide to assist you in budgeting effortlessly.

Let me know in the comments below

How has budgeting changed your life? If you have not started budgeting as yet, why haven’t you?

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