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Oh, budgets. They’re a pain and pretty boring, am I right?

Well, they can be.

If you don’t have any money and don’t know how you’re going to make it until your next paycheck, then there’s no fun in creating a budget.

But having a budget is one of the biggest keys to really managing your money.

Having a budget puts you in control and will help you stop overspending and reach your goals.

Budgeting can also save you money, and allow you to have more to spend by helping you to make the most of your money.

Are you ready to get started? I know you can do it!



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Step 1: What is your income?

For a lot of people, this is simply the money from their salary. But if you are a business owner or if you have additional income from a side hustle, you will want to include all of your income in your budget.

If your income is inconsistent, write down the minimum amount of income that you’re sure you’ll be making this month. Even if you have a potential for overtime earnings or tips, you should only list the minimum amount of income that you bring in. This will leave you with a lot of wiggle room for when you have a really good month.

Here’s an example.

If you work as a waitress and are just guaranteed your hourly wages of $1,000 a month but you think you can make up to $2,000 a month if you include tips, then you should still only budget for $1,000.

Write down your income on the top of a paper. Example:


  • Salary: $1,000
  • Side hustle: $400
  • Husbands salary: $2,000



Step 2: What are your bills?

This is where the real work starts but it’s an important part of your budget so make sure to write the numbers as accurate as you can.

List ALL of the bills you get each month underneath your income on the paper. Just list your bills, don’t start to add any other expenses just yet.

If you don’t have your old bills saved, you can go into your accounts online and look at the average number for each expense category from the past 1-3 months.

When you’re finished listing your monthly bills, add them all up. Then subtract the bills from your income.

Don’t get discouraged if you don’t have any money left over! We’ll fix this down below!

Here’s an example of how you should list your expenses:


  • Rent: $1,200
  • Electric Bill: $30
  • Gas Bill: $20
  • Insurances: $350
  • Student loan payment: $100
  • Childcare: $200


Subtract the bills from your income. Example:

Income: $3,400
Bills: $1,900
Amount left: $1,500



Step 3: How much should you spend on groceries?

Groceries are the largest variable expense you have each month, but it’s also the category in your budget where it’s easiest to cut back on the spendings.

If you’ve never tried to reduce your grocery spending’s before, you shouldn’t try to limit your grocery budget the first thing you do. Living on a budget is a process, and it’s better to reduce your grocery bill little by little every month to not overwhelm yourself.

You don’t want to budget $100 for the month and then spend $200 in one shopping trip. Then you’ll need to start making a new budget all over again.

Check your bank account or credit card bill to determine how much money you usually spend on food each month. Don’t forget to include the meals you’ve ordered from restaurants too!

Each month the USDA puts out a report about the cost of groceries so that you can use this as your starting point.

In this table, you can see the average grocery costs calculated for a range of family sizes in the United States. The costs are divided into a thrifty plan, low-cost, moderate-cost, and liberal plan, assuming that all meals are prepared at home.

Don’t cut back too drastic in the beginning or you’re just setting yourself up for failure. Set a goal to try to cut back 10%-15% and then cut back again next month and the month after that.

The keyword here is baby steps! These changes won’t happen overnight but it will get a little bit easier every month.

Here are some great resources to help you cut your grocery budget:


Add groceries to your budget. Example:

Income: $3,400
Bills: $1,900
Groceries: $200
Amount left: $1,300



Step 4: Let’s choose substitute!

Take a look at your monthly bills, what can you do to reduce your monthly bill payments?

Here are some ideas:

  • Call your insurance company, cell phone provider, etc. and try to negotiate a lower bill or find a cheaper replacement. Don’t be afraid to play hardball. These companies want to keep you as a customer.
  • Replace cable with Hulu or Netflix.
  • Cancel magazine subscriptions and start reading them online.
  • Download the 100 Easy Ways To Save Money Workbook for even more tips on how to reduce your spending’s.


Now, let’s add all the extra stuff in your budget. This is things, also called discretionary expenses that you could live without if you needed to do a major cut back.

Examples of discretionary expenses include entertainment, personal care, clothes, dining out, gifts and vacations.

Base the costs on what you can afford and how much it’s worth to you. If you can afford to pay $100 for a pair of jeans and think it’s worth to spend that amount on a pair of jeans (spoiler, I would never pay more than $40 but I’m cheap!) then you can add that to your budget.


Go ahead and add your discretionary expenses to your budget. Example:


  • Rent: $1,200
  • Electric Bill: $30
  • Gas Bill: $20
  • Insurances: $350
  • Student loan payment: $100
  • Childcare: $200
  • Groceries: $200
  • Debt repayment: $300
  • Clothes: $50
  • Personal care: $50
  • Entertainment: $100
  • Other: $50



Step 5: How much can you save?

Emergency fund

Sometimes things don’t turn out the way we’ve planned. And when that happens, you need to be prepared.

If you don’t already have an emergency fund, now is the time to start one. Set up a bank account that’s hard to access, i.e. the Aspiration Summit Account. It’s an FDIC-insured checking account that offers high-interest rates and has been named a “Best Checking Account in America” by Money magazine.

Make sure to set up an automatic monthly transfer so you’ll never be tempted to spend the money on something you really don’t need!

Having an emergency fund that can cover all your bills for three months or even six months, might feel discouraging.

If you currently have $0 in your emergency fund, then set a goal to save $1,000.

Calculate how much you can afford to save every month and make it at least $25 a month.

Save even more if you can, but I’m sure that you can manage to save a minimum of $25 each month, even if it means you need to switch to cheaper makeup or stop buying takeaway coffee.

The emergency fund is a reserve that you set aside to cover any sudden costs such as a car wreck, hospital bills or if you lose your job.

The reason for having an emergency fund is simple:

Anything can happen. 

And you need to prepare yourself for this before something happen.

Sure, you could use your credit card to pay these bills. But every time you use your credit card, you create debt. You can keep the debt from growing by paying off your balance each month, but if you only pay the minimum and keep making purchases, your debt will grow.


Other savings

There are also other expenses that need to be covered every once in a while. Make sure to save a little bit every month for things you don’t pay that often like gifts, vacations and other things like property taxes.

Make a special bank account for these kinds of expenses that is separate from your primary checking account. You don’t want these occasions to come as a chock in your month-to-month budget. Instead, add some money to this account every month to fill it with the necessary amount for the upcoming occasion.

If you wait until the last minute before adding Christmas gifts to your budget, you’ll need to spend for example $500 of your December salary on Christmas gift. But if you start saving for this 6 months in advance, you’ll only need to save $84/month, or $45/month if you start saving in January.


Decide how much you want to save each month and add it to your budget. Example:


Emergency fund: $50
Retirement: $50
Gifts: $30


Step 6: Will your budget hold up?

Subtract your expenses from your income. If you:

  • Get a positive number – This means you make more money than you spend (yey!). You can go back to your budget and adjust your numbers if you want to. For example, put more into savings or add a weekly date night fund.
  • Breakeven – This means you have exactly enough money, but no margin. You may want to adjust your budget to give yourself some margin in the form of a “discretionary” category if things come up that you didn’t plan for.
  • Get a negative number – This means you’re spending more money than you make. Adjust your budget by decreasing some of your discretionary expenses or find a way to increase your income. For example, spend less on entertainment, dining out, or other non-essential things. Whatever your number is, there is power in knowing. It’s the first step toward planning your financial future.



Don’t think that the hard work is done!

Your budget is done! And as you noticed, it really isn’t that hard.

But the hard work comes after you’ve created your budget when it’s time for you to implement it and start living.

Every month, you need to keep track of where your money is going. You also need to adjust your budget if you slip up, find a bill that you forgot about or just calculated something wrong.

It’s okay to slip up. Everyone goes over budget at some point.

But whatever you do, don’t give up on budgeting! If you stick with it, it will all be worth it!



Let’s chat down below! Have you created a budget yet?