Tips and Tricks Tuesday-How to Start a Budget in 6 Easy Steps

Did you know April is financial literacy month? That means it’s a good time to take an honest look at your financial situation and take action where action is needed. A monthly budget is a key component to financial success. It’s not simply for those on a limited income. A budget gives you full control over where you choose to allocate your hard earned moola. How to start a budget and where to begin doesn’t have to be confusing or overwhelming. And to help get you started on the right financial journey, I’ve included a free budget form for you to download.


The statistics are pretty clear when it comes to finances. Making and keeping a budget brings peace of mind and a real sense of control over your money. I know people think a budget is restrictive and it means you can never ever have fun again. Not true. A budget gives you control to tell your money what to do. If you’ve ever deposited a check on Friday, had a “busy” weekend, then looked at your bank account on Monday morning only to find you have nothing left for needs, then this post is for you.


What I’ve learned over the years about family finances is that it’s absolutely important to have a budget in place. Taking care of our homes and family usually means we take care of the finances too. It’s not always fun, but it is always necessary. So if you find yourself setting bills aside and saying to yourself you’ll get to them later, and later never comes; or if you find yourself paying a bill in order to keep that utility going, then this post is here to help. I’ll discuss my simple solution on How to start a budget…and stay on one.


If you’ve never been on a budget before, give yourself 3-4 months to get used to the process. It won’t be easy at first, but it will become part of your routine.

  1. Set a day, time, and location to budget. I have appointments for just about everything here in Lewisville. There’s a day for doing laundry, a day for cleaning, writing, shopping, etc. You need to have a budget day also- at least twice a month, maybe more if you’re just starting out with this budget thing. Ours is Monday afternoon at the kitchen table. Find a day, time, and place where you’ll sit down for half an hour and budget. Stick with it. Once a week? The day before payday? morning? noon? night? You decided, but don’t skip the budget appointment.
  2. Set bills in one place, the same place as they come in the mail. Organized bills is key to having a good budget appointment. As bills come in the mail, place them all in one place, the same place every time. It may be the top drawer of your desk, but it’s not the kitchen counter. It may be a hanging file system in the kitchen, but it’s not the drop zone table where everything goes and disappears. As soon as you see the bill, you don’t have to open it, but you need to put it in it’s place.
  3. Write Your total income. This will be simple for most of us. Your income is every revenue stream  placed in your hand. That usually means a paycheck every week, two weeks, or month, but include any side gigs you might have-babysitting, writing, etc. That’s all considered income. Write it out. If you have an irregular income, start with what you have today. Adjust the total income as funds come in.   monthlybudget form
  4. List your expenses. This is the part people hate. We don’t like to look at bills or think about how much we’re spending on things like going out to eat. Most of us would rather ignore our expenses all together, but this is where most of us can fall into trouble- Big Trouble. For the first month, track your expenses. Most of us have this idea that as long as we have money in the bank, we have enough for a coffee. When we take a truthful look at what’s going out, we might be surprised. Some of us will be shocked. It usually goes something like this. “I had no idea!” The first time you write out your monthly expenses, it’s going to hurt. I’m not going to lie. But you must do it. It will be painful now, but it’s worth the peace of mind that will follow. I promise it’s so worth it! List every single thing you spend money on through out the month. Utilities, debt, child care etc- think about everything. For the first month, you may have to approximate amounts. For example, you may write down $500 for dining out, but as you keep record of your spending this first month, you may come to find out that dining out  category is really $953!
  5. Subtract expenses from your income. This should equal zero. A good budget means that we “spend” every dollar that comes in the house. That sounds backwards doesn’t it? Remember, we tell our money where to go. It goes to savings, it goes to bills, it goes to sports and music lessons. If you don’t apply money to every category in your life, you’ll find a way to spend it (frivolously usually) on something you found at the sale rack that you’ll donate in two months. So spend every dollar and place it in the right categories.
  6. Track your expenses. There are some set numbers in our budget that won’t change. We have an exact amount for the mortgage, t.v. service, and insurance, but other categories may vary. You’ll have to track those and adjust the budget as needed. If I budget $300 for groceries for one week, but spend $345, where does that money come from? Again, you decide. I may take it from next weeks grocery budget or shave off a few amounts from categories that are adjustable. You may also find that what you thought was enough for one category is not nearly going to cover it, or maybe you’re just overspending somewhere. Track your expenses and decide what areas need adjustment.


At the end of the month, you will have saved, paid the bills, given, and still had fun going out.  That’s because a budget accounts for all those things- including a mad money category if you want. To help you get started, I included a simple budget form that will get you thinking about your budget. I didn’t included a debt category, but there is room to add your car payments, credit cards, and loans.

We’re off to a good start for financial success!

Monthly Budget Form- download HERE


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