It’s time to make creating your budget a breeze! You’ll find out just how easy it is to make your very own personal budget in this simple guide.
I choose to make things easy. No one needs more stress in their life, am I right?
To make it super easy for you I am going to tell you:
- What templates you need for a successful budget
- The exact categories you need to include in your personal budget
- How long you should be spending on your budget each month
Very first thing you need before starting a budget – a template
1st Template –
Before you even start writing out your budget, you need a place to write it. Now, when I first started budgeting I wrote it out in a notebook. I wasn’t smart enough to search for free budget templates online.
After the first initial months I found a free budget template on Pinterest. I printed out that sucker so fast and was THRILLED to have found a free printable! (Little did I know back then that there are thousands of free options.)
Some of my favorite free budgeting template options are:
After I started using the free ones I realized that I wanted a budget a little more simple and straightforward. I eventually created my very own budget templates and a whole Financial Planner to go with it.
I’m continually updating the templates to fit mine and my readers needs, your budget will continuously change. Your needs will be different, your budget should change with you.
Starting with a free budget template is an awesome option when you’re first starting out. As you continue with the budget (and save up) you can upgrade to Financial Planners.
Or, if you’d rather write out a budget in a notebook you can definitely do that. Just follow sections to fill out below!
2nd Template –
Your second template is going to be an income tracker. You’ll use this to track your income for the month (obviously).
3rd Template –
The third template you need to include is an expense tracker. This is what you’ll use to track your expenses for the month and see how much you’ve spent in each category of your budget.
First Section in your Personal Budget
Income Category
The first thing you need to focus on to put in your personal budget is your income. How do you know how much money you can spend if you don’t know how much money you make?
I include three different sources of income in my budget.
Second Section in your Personal Budget
This second section of your budget is where you’ll start including the different categories in your budget.
To me, the less categories the better. If I can lump things up in a single category, great!
This second section of your budget will be focused on the necessity categories.
These are all the things you need (even though I feel it should be, Netflix is not a necessity) and expenses that are recuring payments.
Rent/Mortgage Category
The first category in your neccessities section is your home. You’re either paying rent or paying a mortgage. (Unless you live at your parents, which can definitely save you some moolah!)
Write down the exact amount you pay each month.
Utility Category
Include all utilities such as internet, trash, cable, gas, electric, water, etc… Most are going to be a set price every month, like the internet.
Others, like electric and gas, just estimate what it’s going to be for the month based on the previous month.
Don’t forget to include your cell phone bill. If it’s combined with your cable then that’s great! You don’t need to do an extra category for it. But, if it’s on its own then you still have to include it into your personal budget.
Insurance Category
Next is the categories for the important payments like your insurance. Car insurance, homeowners insurance, life insurance, etc.
Even if you pay yearly instead of monthly, divide the total amount by 12 so you can set aside that amount for when the payment comes up. (This is called a sinking fund and is a budget game-changer!)
Auto Category
Next up is auto. Here you want to put your car payment and how much you think you’ll spend in gas for the month.
Pretty easy so far, right?
Debt Category
The next couple of categories I advise you to put down any debts you are paying off. I know you’d much rather put that at the bottom of your budget and maybe ignore it.
Don’t forget to include credit card debt, medical bills, student loans, etc.
Grocery Category
The last necessity is food. Include your grocery amount in this section because obviously you need food to survive.
This is where going through your past months expense is going to help. Base it off what you spent last month. Don’t try to short yourself.
Tithing/Charity Category
Last, but not least, is charity or tithes. For us, we give 10% of our income to tithing.
If you personally don’t then just skip this category, but for those who may give tithes or charity for religious purposes I recommend including it in the necessity category.
If you’re wanting to give to charity after you have extra money left over, include it in the second section.
Bonus Tip: I always put an additional category titled “other” at the bottom of these just in case I have something come up for the month and can easily fit it in.
Second Section:
The second section to fit into your personal budget is any extras.
Eating Out Category
Don’t include this into your grocery category, you want it as its own separate category.
Again, use the amount of what you spent last month eating out.
Clothing and Household Category
There are things that will always come up that we need to purchase for the house. Whether it’s laundry detergent or paper towels (which we go through unusually fast).
Entertainment Category
Otherwise known as the fun category.
This is for those who love seeing the new movies that come out every weekend (my husband). That’s why we include this category.
It’s also important to at least include a fun money category that you can spend on whatever you want without feeling guilty.
Miscellaneous Category
Sometimes there are expenses that don’t fit into any category of mine and are too small of an amount to make their own category.
That’s why I include a miscellaneous category. For all those random expenses that you just can’t explain.
Savings Category
Add savings according to what you’re saving up for such as a house, a car, retirement or even an emergency fund.
Make sure to include every single one so that you are mentally aware of it every time you look at your budget. That will encourage you to put any extra money into one of those savings.
At the end of the month include your monthly totals. I put in my total monthly income, total expenses and total savings. Subtract your expenses from your income and adjust your budget accordingly.
If you spent more than your income then don’t stress, you have time to adjust. Just fix your numbers, raise and lower where needed, and try again the next month.
If you’re still struggling to balance it out, check out my post on What Expenses to Reduce from your Budget.
You have now officially created your personal budget. Congrats, you are well on your way to financial freedom!
P.S. Know someone who needs major help creating their own budget/spending plan? Share with friends and family below to help them out!
Felicia says
I truly enjoyed this post, I’ve been trying ti figure out a better way to sort out my finances and save more money. Very useful information!
McKenzy Potter says
Thank you, I’m so glad you enjoyed it! It’s an awesome time to start sorting out your finances with the new year coming.