An Easy Way to Begin Budgeting

Welcome back to the blog! Today we are talking about budgeting! Do you believe in budgeting? Do you have a budget?

If you answered yes, great. If you answered no, then keep reading, I got something for you.

You need a budget…. respectfully. Period.

Let me ask you this? Do you want to live a better life than what you are currently living? Most people want better right? Unless you have absolutely everything plus peace. If this is you, please give me some tips! 

If you want a practical way to help you get more of the things you want – that can be bought, then I would suggest having and maintaining a budget. If you didn’t know this, wealthy people know their numbers, they know how much they spend in a year, where their money goes, etc. Don’t think for one second that they just spend frivolously because they have the means to do so.

So what is a budget?

Investopedia provides this definition for a budget:

“A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money.”

To make it simple – a budget is an estimate of how much money is coming in and going out over a certain period of time.

Do you know how much money comes in and goes out on a monthly basis? Can you give me a ball park number on how much you spend on groceries a month? What about eating out or shopping? To help us get to a place where we are aware what are numbers look like in a period of time we will learn the first part of budgeting.

How to Create a Budget?

I like to make my budgets simple. I start by simply knowing who I owe, how much I owe, the current balance, the due date, the monthly amount, and the interest rate if applicable. Let’s start by just listing all of our monthly financial obligations. If you have never created a budget and you are starting from scratch this method may help you get organized before budgeting. If you now how to create a budget, you should check out some of my budget templates!

Step 1:

Write down every financial obligation you have along with the criteria I specified above: (who you owe, how much the monthly payment is, the balance, due date, and interest rate). 

Is it more than you expected to see on paper, less than you expected, or just what you expected? How does it make you feel?

I felt horrible when I first saw everything on paper, I can’t lie. I felt like a failure – but I wasn’t and I’m not a failure – I just had some learning to do. And that I did. It’s okay of you’re not where you want to be, just put in some work to get there – one step at a time.

Step 2 : Categorize 

Now we are going to categorize your money between two major sections –  income and expenses. Income comes in and expenses go out. Let’s start by determining your monthly income.

If you work a job where you get paid bi-weekly then add two lines for you to enter your income for every pay period in the month.

 If you get paid more frequently in a month or less frequently just adjust how many lines you will need to write out your income for the month. For example if you get paid weekly you need about 4 or 5 lines for every week in a month.

You can also refer to your banking statements to see how much income came in last month to give you a ball park idea if you are unsure how much you make a month/how much came in or if it fluctuates.

Once you have all your sources of income on paper/ added up everything you expect to come in every month, you will write the total on the Total Income line.


We’ve already started this process earlier so now we will categorize your expenses so that it makes sense to you. Some people like to categorize their expenses by fixed and variable. Fixed expenses are expense that do not change in amount. Your rent, car payment, car insurance are examples of fixed expenses.white woman dressed up at desk looking down like working on something important or readingVariable expenses are those that fluctuate or are variable meaning they can change. Examples are your electric bill, water bill, credit cards, and gas to name a few.

Then you add in categories like these, do what works for you:

– eating out
– debt payments
– savings
– giving


What is your total expenses for the month for each category (if you separated by fixed and variable)and then what’s your total expenses for the month (add fixed + variable)?

Now refer back to how much income you or your household brings in a month. Compare your income to your expenses. Do you have enough income to cover all your obligations?

If you don’ have enough, don’t feel bad, I’ve been there! Definitely talk to your creditors. I was so afraid to answer the phone when creditors’ used to call me. It could have helped my financial situation so much sooner if I’d been open to help and talking about my issues.

Some creditors allow you to change payment dates and will actually work with you so that should always be your first step especially if you are behind on payments.

Simply put: to create a budget list your expense and income and use the formula below:

Income- Expenses = profit/(loss)

Where do you stand? Do you have money leftover or no?

Catch the next blog post to see what I like to do after I create a budget!



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