How to Make a Budget

How to Make a Budgetsaved money in a jar

Making a budget is more important than many realize. Without one, it is hard to achieve your long-term financial goals. You may also find that you are living outside of your means and that you don’t have enough money for the things that you need. This is most likely because you have spent money on things that you want in the interim without factoring in all the necessities of life.

Many people don’t even think about following a budget let alone prioritizing their spending. If you make up your mind to create a budget and stick to it, you will find that you have the money for the things that you need even if you must cut out a couple of things that you want. This will depend on the amount of income and outgo that you have.

There are many reasons why making a budget is beneficial to your household. Below I have outlined the easiest way to make a budget for those that want to but don’t know where to start.

Calculate Your Net Income/Total Monthly Income

First, combine all your income received monthly. This includes your earningsbudget tips with sample budget from employment and any other source such as Social Security or Disability. Make sure you are listing the after-tax amount, and any income received from your spouse if you have one. Don’t leave anything out.

List All Your Monthly Expenses

Add up all recurring monthly expenses such as electricity, rent or mortgage, and any other utility payments. You must also list other bills like HOA dues, gas, food and items that you spend towards your monthly entertainment such as the movies. Every single dollar that goes out must be accounted for.

Pay Yourself First

When you get your paycheck the first thing that you should do is deduct the amount you can afford your savings. You should have at least $1000 in your savings as an emergency fund. You can put aside whatever you can afford, $5,retirement and savings street signs $20, $50 or $100 prior to paying anything else.

Subtract Your Expenses from Your Monthly Income

When the first two steps are complete just subtract your monthly expenses from your total monthly income. Hopefully, when this step is complete there is a positive number remaining. If the result is a negative number, this means that you are living above your means by spending money that you do not have.

There are programs that can help you budget your income as well as save you money. I have listed them below.


logo for Shrinkabill

Shrinkabill saves you money on your existing bills. Their employees’ focus is to negotiate on your behalf to lower your bills. They have a great track record at lowering many types of costs such as your cable, internet, cell phone, and home security bills. Shrinkabill has been featured in, Forbes, AARP, Newsweek, and CBS news. They also provide a 100% risk-free double guarantee, and they also will send you a $25 gift card if they do not lower your expenses.


Trim is an AI (Artificial Intelligent) assistant that can automatically you save money by negotiating lower rates on your bills, cancel old prescriptions, cuts off forgotten recurring charges, contests overdraft fees with your bank, andTrim assistant services identifies expenses that can be reduced. You can also give commands to Trim for specific actions such as real-time balances on your accounts. Trim also helps you save for retirement and can open investment accounts. You can even communicate with Trim through text. They have been featured in The New York Times and NBC News. There are a lot of advancements coming soon.

Sticking to your budget is key to its success. You will find that making your budget and sticking with it will lead you to financial freedom. If you have any questions, please don’t hesitate to ask below.

4 thoughts to “How to Make a Budget”

  1. Making a Budget, the bane of most households. It took me awhile to really learn that living below ones means is great financial security. I wish I had paid off my student loan years ago, as soon as I get it paid off I will be debt free.

    Your page is a great reminder to me that whatever it takes, make a plan, make a budget and learn to live below one’s means.

    I also liked the pay yourself first rule, so many people violate that rule and pay off everybody else first. then wonder why they struggle.

    Making a budget and learning to pay cash for my toys instead of using credit was my ticket to setting and using using a budget.

    Great success as you move forward..

    Daryl Smith

    1. That is awesome that all you have is student loans to contend with and then you are debt free. There are many who have a lot more than student loan debts. 

      Putting money away in savings is so important. People do not realize that they need savings until they need it of course and then it is too late. I did not learn that lesson until later on in life. Thank you for the feedack.

  2. Hello Shawna
    I found your post very interesting. I have heard people say before pay your self first. I am starting to be a believer in this. But I really found the 2 companies you mentioned Trim and Shrinkabill. I have never heard of these before nor did I realize they even existed. I like the idea of someone being able to help me cut my bills down by negotiation. Thank you so much

    1. Hello Melissa. I am glad that you enjoyed my article. The only way to save is to pay yourself first. If you wait until after all your bills are paid chances are there won’t be anything left to save. I have the money I want to save on direct deposit into my savings right when I get paid. I never see the money and it never is in my checking account. It works well for me this way. I also have money in my 401k, IRA, and my daughters college fund on direct deposit as well.
      I use both Trim and Shrinkabill. They are both awesome tools. Thank you for taking the time to leave a comment. Best of luck to you!!

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