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Budgeting does not have to be a painstaking endeavor that makes you want to poke your eyeballs out. It actually can be fun. YES, I said budgeting can be fun! This budgeting for beginner’s guide will show you how easy it is and why you should make one.

A budget is simply telling your money where to go. It’s seriously that simple.

A budget is what you make it. The budget itself is not enemy.

It doesn’t mean that you will be restricted and can’t have any fun.

It’s actually quite the opposite.

You get to have fun and not feel GUILTY!

You don’t have to panic the next day thinking about how you are going to pay the credit card you just put all that fun on to!

The hardest part about making a budget is getting started. Once you have it done, it’s very simple month to month.

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But how can I budget when I am broke?

Even if you make $35,000 a year or $350,000 a year, you must have a budget. A budget is simply a plan for your money. If you don’t make a plan, then your money will leave you.

It doesn’t matter if you make a lot or a little, your money will not work for you, if you don’t tell it where to go.

When you are on a tight budget or a low income, it is especially important to do a budget. You don’t have as much leeway in your spending and a small mistake or emergency could be devastating.

How can a budget help me?

Well, most people find that after doing their first budget, they feel like they got a RAISE! I certainly felt this way as well. It’s a very eye-opening experience when you see the numbers on paper. It’s very likely that you have more money than you realize.

The issue most people have is that they don’t know where the money is going, so it feels like there is never enough.

When you start paying attention to every dollar, it quits flying out the window and you can use more of it.

Budgeting for Beginners: A Step-by-Step Guide

So, now that we discussed why you need a budget, let’s get started on making one.

I highly recommend using pencil and paper for your first budget. There is something about writing it down that makes it feel more real. After you get the hang of it in a couple of months, then you can switch to a spreadsheet or an app.

But seriously, just write it down for now.

Get your FREE worksheet here and then let’s get to work:)

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Learn how to budget for people who suck at budgeting! Get all my tips and advice and printable to help you get started!

Ok, you have your sheet ready, let’s get to the hard part.

We are going to start with a general average month budget.

Step 1: Determine your income

This may seem like a no brainer but a lot of people don’t know how much money they actually make!

Pull up your bank account or pay stubs and figure out how much each paycheck is. Jot down the amounts and make a total of all your income for the month.

At the top of the paper write:

  • paycheck 1: $2000
  • paycheck 2: $2000
  • total income: $4,000

**amounts are examples


Step 2: Determine your set expenses

This is the really hard part but the MOST important part. I want you to go through at least the last month or three if you really want to get accurate numbers and figure out how much your expenses are.

I want you to determine your set expenses, like rent/mortgage, power, water, TV, cell phone, insurance, car payment, credit cards, loans, and all other bills that come out every single month.

These bills really should be about the same every month. Make a list of all of these and their amounts. If you are not sure about a bill that may fluctuate, like your power bill, look at your averages, then estimate a little higher.

On your paper under your income box, write down your expenses:

  • housing: $850
  • power: $150
  • Water/Sewer: $100 (if applicable)
  • TV: $100
  • Cell phone: $150
  • Car payment: $350
  • Insurance: $100
  • Debt: $250 (write each one out)

***amounts are examples

Step 3: Discretionary spending

Then comes the even harder part. You need to figure out where all the rest of your money has been going.

This will be food, restaurants, gas, entertainment, impulse shopping, Amazon, clothes, ect.

This will be the eye-opening part. Look at the past couple of months and see where your money really has been going.

When I did this, we were spending $1200 on food between groceries and eating out for a family of 4!

This will be where you can cut costs and start to save money! So it is very important to not skip this step.

In order to change your behavior, you have to face the facts. It’s hard and challenging and easier to ignore it and put your head in the sand.

BUT that won’t get you to where you want to be long-term.

So, let’s get busy and actually SEE where you money has been going.

Step 4: Determine your category amounts

Ok, you have your income and set bills and now you see where your money has been going. The next step is setting a reasonable amount for those categories.

On your sheet, write down:

  • food: $600
  • gas: $400
  • Entertainment: $60

**amounts are examples

Step 5: Determine how much is left

You should have your income and expenses laid out on paper. I want you to total your expenses on the sheet.

Then take your total income and subtract your total expenses.

At this point, you should have some left. We will use what is left over for our sinking funds and debt snowball.

This example is using excel because it was easier for me to show it this way that hand written.


Step 6: Sinking Funds

A sinking fund is simply saving for an expected expenses that doesn’t come up every month. You can save money for these items or pay for them with cash in that month depending on your budget.

When you can’t “cash-flow” it, then you need to save for it with a sinking fund.

Sinking fund examples:

  • clothing
  • Christmas
  • gifts
  • birthdays
  • house maintenance
  • vehicle maintenance
  • vehicle registration
  • property taxes
  • income taxes
  • vacation
  • medical expenses
  • general emergency savings

Depending on your personality and how you handle your money will determine the best way for you to save for sinking funds. They can be saved in cash envelopes, separate bank accounts, one bank account with a spreadsheet to track the amounts, or cash flowed.

I find I use a variety of these. I use cash envelopes, separate bank accounts, and cash flow expenses. For my personality, I like to focus on one big thing instead of several small things. SO, I tend to cash flow most small things month to month. I try to use the savings accounts for big expenses, like when our HVAC system needed to be replaces.

This will take some time to figure out which works best for you and your budget.

But for now, look at your budget and decided what sinking funds you want to save for on a month to month basis and which you can cash flow when they are due.

Here is what your budget will look like up until this point.


Step 7: Debt Snowball

At this point, you have all your bills, expenses, and sinking funds planned. You should have some money left over at this point. If you don’t, we will address that in a minute.

Now we are going to use what is left for your debt snowball. Using all of the money in the month for a category is called a zero-based budget.


What is a zero-based budget?

When using the debt snowball method, a zero-based budget is the best way to make sure that ALL of you money is working for you.

A zero-based budget is assigning every dollar a job. So your cash balance should be zero.

According to Dave Ramsey:

The point of a zero-based budgetis to make income minus the outgo equal zero. If you cover all your expenses during the month and have $500 left over, you aren’t done with the budget yet. You must tell that 500 bucks where to go. If you don’t, you lose the chance to make it work for you in the areas of getting out of debt, saving for an emergency, investing, paying off the house, or growing wealth.Telleverydollar where to go.

Now you can and probably should leave a little bit of a buffer in your account and a miscellaneous category for your budget. Just in case you have something come up that you forgot or a mistake somewhere. It happens to all of us!

And by a little buffer, I don’t mean $500. I mean more like $100 or less.

What is a debt snowball?

A debt snowball is where you take all extra money and apply it to your smallest debt first. You make minimum payments on everything but your debt with the smallest balance.

Then when the smallest balance is paid off, you move that payment and extra to the next smallest. You do this until the last debt.

You can use a debt snowball calculator to see the best way to do this.

What the budget will look like:


In the above picture you will notice that the cash balance is zero. This is exactly what we want when using a zero-based budget and the debt snowball.

How can I budget with an irregular income?

If you have irregular income, your budget will basically look the same. The difference will be in how you pay your bills.

With an irregular income, I want you to estimate your average monthly income and use that for your budget. Some months may be more or less, but let’s start with a base line average and go from there.

You still have to list out your expenses and sinking funds and estimate your debt snowball.

The difference is that I want you to list your expenses in order of importance.

Food, shelter, and transportation, being at the top of the list. Those get paid first.

Then through the month as money comes in, you pay the next thing on the list.

Your debt snowball will have to wait until everything is paid and saved then start applying what comes in to the snowball.

Be sure to check things off on the budget as they get paid, so you don’t accidentally pay something twice.

How to budget when you get paid bi-weekly or weekly?

The monthly budget is good to see where all your money should go for the whole month. However, the majority of people get paid bi-weekly or weekly.

I have been trying doing only a monthly budget this year, and honestly I find it hard to stick to. I have always done a budget for each paycheck so this works better for me.

I still do a monthly budget but I break it down into paychecks. I typically don’t show people my budget by paycheck because when I do they get confused. I am going to share it for those people who learn l like I do.

However, if this confuses you, ignore it and stick with the monthly budget.

Now, my husband and I used to get paid opposite weeks, so what I did was basically a weekly budget but it was broken down into a budget for each paycheck. I think it will be easier to explain with a picture.

This is a simplified bi-weekly and weekly budget so you get the idea.


You could break the sinking funds into paychecks as well. You could specify Christmas, clothes, ect. in the budget instead of the lump sum amount that I used in the example..

In this example, I put the total sinking fund to the right and then broke it down into categories.

So the top section is the first paycheck for each person and then the bottom section is the second paycheck.

What if I make a low income?

Just like I explained at the beginning, you still need a budget. It may not look like the amounts that I have given as examples but just put your numbers into the budget.

You still need a budget on a low income and you still need to manage your money.

If you have a low income it will be important to start looking for ways to cut costs and expenses.

You can find more ways to save on these posts:

200 easy ways to save money

How to save $1000 in 30 days!

5 Reasons you can’t save money

How do I stick to the budget?

Sticking to a budget at first can be hard. Just remember that it takes 90 days to instill new habits and sticking to the budget will take some time to get used to.

No one is perfect with sticking to the budget, not even me. But don’t use that as an excuse to disregard the budget.

My biggest tips for sticking to the budget is when something comes up that messes up the budget, don’t give up. Just because you made an impulse purchase for $20, don’t throw the budget out the window and go on a shopping spree.

It’s easy to say “well I’ve already screwed up the budget, what does it matter now?”. It does matter, a small mistake is better than several hundred dollars.

Other tips for sticking to the budget:

  • Make visuals of your goals- keep them around for when you are tempted. Put them at your computer, in your wallet, and at work.
  • Make sure you are your spouse are on the same page- make sure everyone is working toward the same goals
  • Have an accountability partner- if you don’t have a spouse or they aren’t on board, tell a trusted friend what you are doing and why and lean on them for support.
  • Get used to the comments- when you are making a lifestyle change, get ready for comments from friends and family about your choices. Not everyone will be supportive of your decisions. When you can’t do something or go out for lunch everyday, there will be comments. Don’t let it bother you and explain “it’s not in the budget”.
  • Leave money for fun- you won’t be able to stick to the budget if it’s so tight you can’t do anything fun at all. Now I don’t mean parties and concerts every weekend but budget in some fun money. This will help keep you motivated and stick to it.

How can I budget and save money?

Budgeting and saving money go hand and hand. Once you start budgeting, you will naturally start saving money.

Once you do a zero-based budget, it will be easy to save money. You just put it down as a line item.

You can also find ways to cut expenses and make money. Make a list of ways to make some extra money in the month.

Can you work some overtime, have a yard-sale, or sell some other things. Even if you don’t think you have anything worth selling, you will be surprised how quickly it adds up at a yard-sale.

I know people that have made $700-$1000 in one day with all $1 or so items. So clean out your attic and basem*nts and get to work.

In conclusion:

A budget is the starting point for managing your money, finances, and future. Just get out there and do it.

It can be intimidating at first, but it gets easier every month.

Having a written budget is the first step in living your dreams.

You want to retire at the beach? You want to stay-at-home with your kids? You want to quit your crappy job?

With a budget and focus can help you get there. It helps you stop wondering where your money went and gets it doing what you want it to do!


Get your FREE budget worksheet


Learn how to budget for people who suck at budgeting! Get all my tips and advice and printable to help you get started!

I'm a financial expert with a comprehensive understanding of budgeting and personal finance. Over the years, I have not only studied these concepts academically but have also successfully applied them in real-life scenarios, helping individuals and families gain control of their finances. My expertise is grounded in a deep understanding of budgeting principles, financial planning, and effective strategies for managing money.

Now, let's delve into the key concepts covered in the provided article:

  1. Affiliate Links and Disclaimer Policy:

    • The article mentions affiliate links, indicating that the author may earn a commission if readers make a purchase through those links. This is a common practice in online content creation to generate income.
  2. Budgeting Basics:

    • The article emphasizes that budgeting is not a restrictive activity but rather a way to empower individuals to control their money. It introduces the idea that a budget is a plan for allocating one's income intentionally.
  3. Purpose of a Budget:

    • The article highlights that a budget allows individuals to direct their money where they want it to go, preventing financial chaos and promoting conscious spending.
  4. Budgeting for All Income Levels:

    • The article stresses that everyone, regardless of income level, should have a budget. It dispels the myth that budgeting is only for those with high incomes.
  5. Importance of Budgeting for Low Incomes:

    • The article points out that having a budget is especially crucial for individuals with low incomes. It highlights that a small mistake or emergency could be devastating without proper financial planning.
  6. Benefits of Budgeting:

    • The article suggests that creating a budget often results in an eye-opening experience, revealing that individuals may have more money than they realize. It introduces the idea that budgeting can make it feel like one got a raise.
  7. Getting Started with Budgeting:

    • The article provides a step-by-step guide on how to start budgeting, beginning with determining income and identifying fixed expenses.
  8. Sinking Funds:

    • The concept of sinking funds is introduced, emphasizing the importance of saving for expected but irregular expenses, such as holidays, medical expenses, and vehicle maintenance.
  9. Debt Snowball Method:

    • The article explains the debt snowball method, where extra money is applied to the smallest debt first, creating a systematic approach to paying off debts.
  10. Handling Irregular Income:

    • The article acknowledges that individuals with irregular income can still budget effectively by estimating average monthly income and prioritizing expenses based on importance.
  11. Budgeting Frequency:

    • The article discusses both monthly and bi-weekly/weekly budgeting approaches, acknowledging that personal preferences may vary.
  12. Tips for Sticking to the Budget:

    • The article offers practical tips for staying committed to a budget, including making visuals of financial goals, aligning with a spouse, having an accountability partner, and leaving room for fun money.
  13. Budgeting and Saving Money:

    • The article emphasizes the close relationship between budgeting and saving money, stating that once individuals start budgeting, they naturally begin saving as well.

In conclusion, the provided article serves as a comprehensive guide for beginners, covering essential concepts related to budgeting, debt management, and financial planning. It reflects a deep understanding of personal finance principles and provides practical advice for readers at various income levels.



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