A 7 Step Guide to Create an Easy to Follow Budget + Free Template
Everyone budgets for different reasons. Maybe it’s to get a grip on poor spending habits, money might be extremely tight, there might be a large purchase to save for, or maybe it’s a way to help get out of debt.
Regardless of the reasons why people want to budget, everyone has virtually the same end goal: financial control.
Unfortunately, it seems like the word budget is often followed by an *eye roll* and a few groans.
You might be thinking, “An easy to follow
Don’t let the reputation of budgets scare you. It’s definitely possible to create an easy to follow budget in order to achieve that financial control you need for your life.
Keep in mind, people who are money conscious are the same people who have budgets. And rightfully so!
Here are just a FEW reasons why budgets are so awesome.
- Budgets help you to avoid spending money you don’t have
- They help you stay focused
- It will highlight poor spending habits or bills that are too high
- They help you prepare for emergencies or unexpected costs
- Budgeting is an effective tool that anyone can use
With that said, let’s make budgets cool again!
Below are the 7 steps to create an easy to follow budget. To help with this, I’ve created a free template for you to download and follow along with.
First Things First
What month is it?
Each month is different. Some months have more bills than others. Sometimes we know we will bring in more money by working extra shifts. Maybe you’re entering a month with a few birthdays or events you need to buy gifts for. You might be going out of town for two weeks and need to consider travel costs.
Whatever your situation is, look at each month as its own entity in order to have maximum success with your budget.
Step 1: Monthly Income
Be realistic. Nothing derails a budget faster than an unrealistic income amount. So how do you calculate your monthly income?
Simply put, your monthly income is how much net income you bring in during a single month. This includes your full-time job, any part-time jobs, income from a side hustle, government-based checks, etc.
Don’t round up to $3,000 if you only bring in $2,700. It’s better to pick a smaller, more conservative number rather than something bigger and unattainable.
For salary workers it’s easier to calculate your monthly income. For hourly workers, this is more of an educated guess. Make sure you’re as accurate and realistic as possible.
Step 2: Current Debt
Debt shouldn’t be swept under the rug. The more you remind yourself of debt, the easier it is to make paying off your debt a priority.
Debt comes in many forms. Here are just a few:
- Credit card
- Student loans
- Business loans
- Payday loans
One of the main goals of having a budget should be to climb
Step 3: Weekly Budget
I get it. You have to spend money and not always on bills. Sometimes we like to go out to eat, go shopping, or we want to buy a gift for someone. This easy to follow budget leaves room for you to do all of those things.
I recommend that you look through your bank statements from the last few months to see how much money you typically spend in a week that isn’t on bills. Decide whether or not that number is high and then write in your weekly budget.
Note: Keep in mind that this number might need adjusting once you complete the expenses category.
Recommended: Create a Monthly Budget to Kickstart Your Savings
Step 4: Savings Goals
Having a budget doesn’t mean that you neglect your savings. On the contrary. A budget helps you to save money.
Saving money should be a priority, not an afterthought. You might be savings for a specific goal like a vacation, a large purchase, or for emergencies. Regardless, you should be saving money each and every month.
Just like it’s important to be realistic about how much money you make, it’s also important to be realistic with how much money you save. Sometimes we set these huge savings goals and struggle to make it.
Instead, set a realistic savings goal that you can achieve every month!
Note: You might want to fill this in last after calculating your bills.
Related: 25 Easy Ways to Save Money
Step 5: Fixed Monthly Basics
Fixed monthly basics are those pesky bills we have to pay each month. Typically, the price stays consistent from month to month.
Here is a list of a few fixed monthly basics:
- Phone bill
- Car insurance
- Health insurance
Don’t forget to download your free budget template to see this list
Once you list out all of your fixed monthly basics, add them up to see how much you’re paying. This is a good time to look for any payments that stand out as too high or unnecessary.
When I did this, I discovered that I was unhappy with the amount we were paying for our phone bill. I began to shop around and I found a phone plan for almost $60 cheaper!
An easy to follow budget will help you visualize exactly where your money is going so that you can make tweaks to your bills if necessary.
Step 6: Miscellaneous Expenses – Budgeted
There are two parts to this section.
Unlike fixed monthly
Here are some miscellaneous expenses:
- Personal care
- Eating out
Again, I recommend going through your online banking for the last few months to check your miscellaneous purchases in order to come up with as accurate of a number as possible.
Typically, this is also the section where cuts need to be made. If money is tight, or you need to save for a goal, you don’t stop paying your rent. No, you cut back on your eating out.
It might be difficult at first, but if you really take the time to create this easy to follow budget, and you stick to it, then you will succeed.
Remember, budget smart, realistic, and with your savings goal in mind.
Step 7: Miscellaneous Expenses – Spent
This is the second part
Unlike everything else in this budget sheet, you complete this part at the very end.
After each month, fill in how much was actually spent on your miscellaneous expenses so that that you can learn your patterns and see what areas are high. You might even have to add a few categories.
At first, this might be a wake up call for you. It can be hard to accept your spending habits until you see them written down on paper.
There is a huge possibility that you will shock yourself when you see how much you actually spend. This might even be the case of bad spending habits such as living paycheck to paycheck.
Don’t let this discourage you! Instead, make adjustment for the next month and continue to work towards success!
With this easy to follow budget, you will be on your way to financial success in just 7 easy steps. You got this!
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