Basic Budgeting For Beginners

Budgeting is a critical skill to learn. So critical, in fact, that it is lost on me how and why it is not taught within the public education system. It’s also a skill that is hardly ever taught by parents to their children, yet nearly all children are raised seeing their parents struggle with bills, debts, and living paycheck-to-paycheck. Maybe it’s a blessing in disguise that poor budgeting techniques are not passed down then?

Budgeting is a very simple matter of addition and subtraction. It gets complicated when you’re forced to sort out your priorities and make decisions as to what you’ll include in your budget category.

In the proceeding paragraphs, I’ll walk you through the basic steps to create a personalized budget that can help you pay off debt, save for what you wish, and allow you to spend on *splurges* if you wish.

If you’re wanting to get started right away, you’ll just need your last 3 months’ bank statements – or (only if you don’t use a bank account to pay out of) a list of all your bills and income.


To calculate your income is simple. Take what you make and add it up. Write this number down. Sources to consider are:

  • What you make from any jobs
  • Payments from family/friends
  • Any other sources


Expenses can get a little fuzzy. Most of us have no ideas where our money goes and then it’s gone! This is where having a bank statement comes in handy. By paying with a debit card, we’re easily able to track all income and expenses. These include:

  • Bills (mortgage/rent, insurance, utilities, credit card minimums, loans, etc)
  • Subscriptions (cable, internet, phone, netflix, gym, things that can be lowered)
  • Any other fees (data storage, bank fees, atm fees, tolls – frequent expenses)
  • Fuel Costs

Once you have all these expenses tallied up, subtract this number from your income. What’s left over is your budget!


Budgets vary wildly from country to country, state to state, city to town, and person to muggle. 😉 It’s easy to come up with your own by considering how you spend money and how you’re willing to save it in certain areas. You’ll need to make 4 lists:

  • Groceries
    • Food – how much are you able to spend to fuel yourself with nutritious foods? (I splurge a bit in this category because my health is my top priority!)
    • Household Expenses (tp, dish soap, laundry detergent, etc)

I like to set aside a set amount for this budget (I have a whole checking account devoted to it, in fact!) Once set, never allow yourself to go over and you’ll have enough set aside for other important things!

  • Debt
    • Loan Principal (extra) payments
    • Credit Card Principal Payments

It’s important to pay off high interest debt as soon as possible. Doing so, you avoid even more debt and can hold onto that money that can be spent somewhere more fun! I prioritize paying off high interest debt before anything else!

Once I set an intention for it and made a plan using this method, I was able to get rid of nearly $5,000 in debt in just 3 months!
  • Savings
    • Retirement – get this automated by your employer!
    • Emergency Savings – enough to pay your bills for 3 months in case of unemployment due to injury, illness, or layoff
    • Special Goals – a car, trip, home project, computer, anything! Never go in debt for something, save for it instead! *Unless you assume yourself to be financially responsible and can take advantage of a 0% apr credit card and know you have the financial means to pay it off before the promotion expires. This can be a great way to build credit without paying the price!

Having savings is something not many can boast about. It is crucial to our long term financial health to have money saved in case of emergencies and retirement. I’ve also included a “special goals” category for one important reason:

It is never smart to go into debt whereas you'll end up paying more for the thing than it is worth!
  • Splurges (clothing, leisure, eating out, etc.)

If you have extra funds after the aforementioned categories, bravo! Now you have money to budget towards splurges! This is where most money normally “disappears”,” when people choose to live paycheck to paycheck. I use the word choice because it, indeed, is one in most cases. There is no need to spend money on going out to eat, fast food, clothing, movies, amusements, vacations, etc. They are choices – choices which many people let rule their “budget” and choices which induce anxiety, financial stress, and future bad choices.

Isn’t it much better to know exactly how much you have left over after the necessary expenses, to have money for savings, and then choose where else the abundance will go, instead of spending carelessly and waking up to find your lights are out because you splurged on going to Applebee’s and a movie last Friday?

To me, it’s not even a question. I want abundance! I want stress-free budgeting! I want to know I’m safe and will have a roof over my head even if my husband is injured or laid off! Don’t you?

If you’re like me and want this lifestyle, I have one more tool for you! It’s an app called Dollarbird. It allows you to track your income, expenses, savings, and spending day-by-day in a calendar-style. It will show you, based on your forecasted incoming and outgoing funds, how much you should expect to have in your bank account (no, it doesn’t liken to it!). You input your regular bills and expenses, income and budget and it calculates it all. No need to input everything each month, either. You can set items to repeat!

AND The best part is, it's completely FREE!

I would have no sense of my budget without this handy little app, and I’m happy to recommend it to you as something I’ve used for over 2 years and am extremely satisfied with. Just search “Dollarbird” in the App Store and voila! You’re on your way to financial awareness and freedom!

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