How You Can Budget in 3 Easy Steps

Budgeting has never been made easier

Wilson Texas
4 min readJun 18, 2021
Photo by Kelly Sikkema on Unsplash

Budgeting is and should be a way of life. A budget is simply a roadmap that tells your money where to go each month. A budget enables you to be in the driver’s seat of how you spend your money, and what you spend your money on. Businesses, organizations, even governments rely on budgets to help them make effective financial decisions that can impact them. This is the reason why you need to have one — in order to stay financially independent or at least be in control of how your money is spent.

Creating a budget is definitely not something to shy away from or dread, and that is why this article would provide 3 easy steps on how you can budget to help you get started. Let’s get right into it.

1. Keep Track of Your Income

This is the first step towards making a budget. Before telling your money where to go, you need to know where it is coming from. You can start budgeting by keeping a record of all your income in a month. It is important to know where your money is coming from in order to make an effective budget. Make sure to include all income sources, from jobs, allowances from family members, stimulus checks, or any other government benefits, cash gifts, investments, etc. It is also important to update your income sources as they come, so they don’t be left out of your budget. This enables you to make clear decisions about your finances and helps you stay ahead towards even making future plans of vacation or buying a car.

2. Keep Track of Your Spending

Now that you know where your money is coming from, you can now tell your money where to go. This is the second easy step in making a budget. Have an estimate for every expense category you may have in a month. This means: have an amount of how much you would spend on each item or product every month. You have to create a list of all expenses you think you can make in a month. Ensure that you include all expenses, from transport bills, rent or mortgage payments, phone and internet bills, groceries, to birthday gifts and special events, etc. which don’t always make it in most people’s budget. It is also effective to include a category called miscellaneous expenses on your monthly budget. This category would include all random expenses that can happen within the month that was not budgeted for. One cannot always know every expense they would make in the future, which is why an allowance should be made to help them stay in control of their finances. When this is done, it gives you an idea of how much you have available to spend on each expense category and can instill some level of discipline to stick to your budget in order to remain financially stable.

3. Make Changes and Adjustments

The next step in making a budget that sticks would be to review and analyze your performance on your budget at the end of the month. Compare and contrast your income with your spending to see If your monthly income is greater than your expenses or otherwise. A winning budget is one whose monthly income is greater than the expenses. This is because it gives the individual some extra money to dedicate toward a financial goal, like saving for a home, buying a car, planning a vacation, paying down debt, or building a retirement fund. For most people, your budget may show you’re spending more than you’re making, which can be a problem because you might always end up broke or borrowing (increasing debt) on or before the end of the month. Your budget can enable you to make effective changes and adjustments, to see exactly where you could cut out some expenses (maybe eating out less frequently) or increase your income (perhaps taking on an extra shift at work each month).

Bonus Tips

Everyone has their own ideas and strategies for creating an effective budget and sticking to it. Here are some things you should know:

  • Ensure you find a system that works for you. This happens when you try out so many tips and review them monthly to see which you can adopt permanently. Some people prefer using spreadsheets, while others prefer smartphone apps or even old-fashioned pen and paper. Keep experimenting until you find a method that works well for you.
  • Create your own personalized “money rules.” Make a distinct promise to yourself, such as, “I will keep my spending on discretionary items to a maximum of $50 per week.” Small but actionable steps can help keep you from feeling overwhelmed and making healthy financial decisions.
  • You can experiment with different time periods, just to see which one would suit your lifestyle. You might prefer to budget weekly or bi-weekly. There’s no reason to stick to a monthly cycle if it doesn’t serve you well.
  • Seek out support. Try bringing your friend, spouse, partner, and/or children on board with your financial goals. With their assistance, it can be easier to build and maintain a budget.

Having a budget can help you make smarter decisions with your finances on a daily basis, and can prevent you from reckless spending to put you in the habit of saving. Having and sticking to a budget is definitely the right foundation in personal finance, and can enable you to become financially responsible and independent in the long run.



Wilson Texas

I’m inquisitive. A passionate Content Writer and a Data Analyst. Sharing Insights on personal finance and development at