Making A Budget: 5 Simple Steps for Making a Plan

Silas & Grace

Learning how to make a budget is one of those tasks in adulthood that feels like homework.

You know you need to do it, and you know that when you do it, it’ll be over and you’ll feel so much better.

But do you feel like making one? No, not really.

However, I think it doesn’t have to be so complicated.

Also, here are a few thoughts that might help change your mindset towards making a budget:

  • It’s a task that doesn’t need to take hours to complete. In fact, you could probably get it done in less than 30 minutes. 🤷‍♀️
  • It’s going to give you so much more peace when you know exactly where your money is going.
  • You’re going to start seeing breathing room and stop living paycheck-to-paycheck.

Of course, there are plenty of great reasons to make a budget, and if you want some help, then here are five simple steps. 😊

1. Figure Out Your Why

Before you start a budget, or any sort of goal, I think it’s important to figure out why you want to do this.

So for instance, you might want to create a budget because:

  • You want to get out of debt.
  • You want to have enough money to have fun, and stop struggling.
  • You want to have money to save up for retirement.
  • You want to give your children new values when it comes to money.

What is more important to you? Figuring this out will help you stick to your budget plan.

2. Write Down Your Household Income

Next, figure out what your household income is after taxes.

This one is a lot more simple, so it shouldn’t take you too long. 🙂

3. Figure Out All of Your Monthly Expenses

For this step, look through your bank account, and also check out what you’re using your credit cards for.

Make lists of the main expenses you already know about: groceries, gas, insurance, etc.

Then as you go through the expenses of the previous month, add in new categories you didn’t think about until it’s all covered.

These could be expenses like pharmacy purchases, or plant food for your houseplants.

And lastly, make a list for one-off’s.

These will be things that aren’t normal expenses like getting your oil changed.

Lastly, subtract your expenses from your household income.

If you’re in the negative, then here are 5 things you can do:

  • Find the non-essentials and cut them out (or at least limit them)
  • Figure out things you can DIY yourself.
  • Find less expensive versions of the products you already buy.
  • Understand the best times to shop in the week to get the best deals.

4. Decide On the Budget Categories That Work with Your Why

Depending on your why and how big it is, this will determine how many categories you’ll have.

So for instance, if you’re $30k in debt and you want to get rid of that debt in 3 years, then you might want to just limit your categories to…

  • Housing
  • Groceries (No splurges or very limited)
  • Transportation
  • Utilities
  • Insurance
  • Clothing (Only if necessary)
  • Internet
  • Phone plans
  • Emergencies and one-off’s

And of course, the less serious or the smaller your why, the more breathing room you’ll have. And with more breathing room, you’ll have more categories such as personal spending.

5. Create Breathing Room

Now if you want more breathing room, then you’re going to have to do some things to create it.

So here are some questions to ask yourself:

  • What are some things I can live without for a short amount of time?
  • Are there other ways I can make more money?
  • Can I change to a better paying job?
  • Can I move to a less expensive living situation? If so, what are my options?
  • What can I cut out in my weekly grocery runs?
  • Can I move to a less expensive internet and/or data plan?
  • How can I limit my one-off expenses?
  • Can buying in bulk save me money?

And that’s it for now! I’ll be updating this in the future to be a lot more useful, but I hope that this was helpful for you and your situation. 🙂

Leveling Up Your Money Managing Finances Money

Silas & Grace

Chasing Foxes was started in 2016 as a way for Grace and her husband, Silas, to start traveling. However, they started to realize that they had a passion for improving themselves, and wanted to help others level up their lives as well. So whether it's with cooking, travel, or staying healthy, they want to help you better your life bit by bit, as they do the same.

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