7 Easy Tips For Beginner Budgeting: See Results Today

Have you ever noticed……

That no matter how much you make, it always seems to be gone at the end of the month?

That no matter what you do, you just can’t seem to get ahead.

I know what you are going through because I’ve been there.

After living paycheck to paycheck for several years, we just couldn’t make ends meet.

After beating our heads against the wall for a few years, we realized we need to change things up.

We needed a new strategy.

We needed a financial plan.

We needed a budget.

After we created our first budget and refined it over a few months, our financial life improved by leaps and bounds!

We quit using credit cards when times were tough. We prioritized what was important to us and quit spending money on things that didn’t matter.

In other words, a budget enabled us to get our $h!t together!

So when I say that you need a budget, I’m talking from experience.

In today’s article, we will discuss what is a budget, why it’s important, and 7 easy tips you can use to get started on creating your first budget.

While not hard, it does take a little bit of upfront work to get started and some time over many months to refine it.

Let’s get started! ……. 😊

What Is A Budget?

A budget is a financial tool that allows you to prioritize what is important to you, assign it a dollar value, and track your progress.

A budget can be as simple as writing it out on a sheet of paper or simple excel sheet (My Free Budget Tool is an example), using an app to tracking income and spending (thank you Mint and Personal Capital!), or a complex spreadsheet that also tracks other things like cashflow, retirement goals, and other financial goals (My Free Budget Tool has all that too)! 😊.

Every great financial plan begins with a budget.

Using a Free Budgeting Tool like Mint or Personal Cappital

A budget is crucial for understanding and guiding you to where your money goes.

IMO, people who budget set themselves up to get out of debt faster, achieve their financial goals ahead of schedule, and practice “priority” spending.

A budget is for anyone who wants to create a sound and successful plan.

Doesn’t matter if you are trying to get out of debt, save for a new car, afford a nice vacation, or retire before you turn 55, building a budget is the best way to achieve your goals and make the life you want to live a reality.

Unfortunately, the general population doesn’t like budgets and over time it has received a negative connotation.

Next, we will discuss why people think budgeting is a negative word.

Why People Think Budgeting is “BAD”

Here are a few reasons people give as to why budgets are bad for you.

Budgeting Feels Restrictive – Budgets have a stigma of restricting options, limiting choices, and forcing personal sacrifices to be made.  When a person is used to behaving a certain way, budgets act like your parent nagging at you to make better choices. It can be frustrating to say the least. After all, who wants to listen to their parents… seriously?  (I know because I have my 3 kids to prove it! Lol 😊)

Budgeting Feels Humbling – Learning good budgeting skills takes some practice and dedication practice to hone your craft. Budgeting does not come easily for a lot of people.

Learning how to budget is like learning how to hit a baseball. IMO, using a round bat to hit a round ball that is twisting and turning at you at 90 MPH can feel daunting. It’s a big reason even the greatest baseball players succeed at hitting a baseball only 30% of the time.

Why Budgeting Is Needed

Budgeting can be the same way. It’s takes time to learn the skills needed and there will be some bumps in the road as you learn. It’s pretty humbling when all the hard work you’ve done to right size your finances can be undone by 1 large shopping spree using your credit card to buy stuff that you just “had to have” because it was “such a good deal”.

Don’t believe me? Ask my wife…… true story. Not knocking her, she just used to have a different mindset on what “a deal” is, that’s all (love you honey! Lol hahaha 😊)

I get it. I do.

Just because it feels humbling doesn’t mean it’s bad for you. It just means you need to practice some patience on this journey.

Budgets Are Hard To Stick To – The simple, cold, hard fact is that budgets are made using logic and reasoning. Purchases often are made using emotion and the need for instant gratification. There is an inherent conflict between the two.

Budget = Not Good With Money – This is the coup de grace. Using a budget has a stigma that a person is not adept with money management. Who wants to admit that?

It’s hard to admit when a person is not good at something, is failing, and needs help. In some households, asking for help can be interpreted as a sign of weakness (I know… I grew up in a household just like that… true story). Who wants to admit they are “weak” and not disciplined?

I talk alot about why people think budgeting sucks and why you need a budget. Here are some articles I published that offer a lot of insight into this:

Why Budgeting Sucks and Why It’s Important

7 Habits of Highly Successful Investors

10 Ways To Spring Clean Your Finances

Different Strategies For Budgeting Your Money

How I Am Achieving FIRE

2022 Beginning of Year Money Checklist

How The 50/30/20 Budget Rule Works

Whether you are new to planning your finances or are struggling to do so, these 7 budgeting tips can be started TODAY and will get you on the right path.

Just follow these steps for creating a realistic budget and watch your financial health improve!

#1 – Write Down Income and Expenses

The first thing you need to do to create a successful budget is to take a sheet of paper or write on a spreadsheet how much money is coming in (Income) and how much is going out (Expenses) each month.

To do this make 1 column for income and 1 column for expenses. Do your best to write down everything you can think of that you either earn money on or spend money on.

How To Create A Budget

Then take the income and subtract the expenses. What’s the result? It’s either money leftover (positive cashflow), you’re short on money (negative cashflow), or it is a net zero (income=expenses).

The point of this exercise is 2 things:

  • Understand where your money is going right NOW
  • Figure out where the money leaks are coming from

It’s ok if you don’t know every single expense. At the very least just swag it. Remember this is a starting point and shouldn’t take you more than a few minutes to do.

Now take 15 minutes and draw up your 1st draft.

Done yet? ……… Congratulations!!! You’ve just created your first budget! 😊 lol

You’ll need to know where you’re spending more than you should for later in the process. These are the money leaks that will need to be closed.

Also, if this analysis shows that there should be money left over yet you know this is not the case, it just means there is a money leak(s) not identified yet. If this happens, just take the surplus money, create a line item called “miscellaneous expenses”, and assign it to that category.

You then should have all expenses = income (net effect = zero).

#2 – Create Priorities For The Next 12 Months

Now that you have your initial budget created, you’ll need to think about why you want to budget your money and what you want to accomplish in the next 12 months.

The reason for this is that there is probably a reason (or 5!) that is motivating you to create a budget. Do some soul searching to find that “why” and figure out what priorities you have for your money in the next 12 months.

Here are a few examples of a “why”:

  • I have a mountain of debt and I want to pay it off.
  • I’m tired of living at my parent’s house and want my own place.
  • My car is 15 years old, and I need a new one.
  • I’m 30 years old and have nothing saved for retirement.
  • My baby girl needs a college fund.
  • I’m tired of staying at home for vacations and want to go somewhere warm next year.

Whatever is driving you to do this, figure it out, and write down those things. Next, set your top 3 priorities for the next 12 months.

Using those priorities, identify if it is a short-term (<12 months) or long-term (>12 months).

For example, if your goal is to buy a house with a 20% down payment, this is probably a long-term priority since it is probably going to take longer than 12 months to save up for the down payment (I know it me longer than 12 months).

How To Get Started At Creating a Budget

On the other hand, if your goal is to go on a Caribbean cruise, this is probably a short-term priority since it takes less money to achieve.

Since you are just starting out, I recommend prioritizing the short-term objectives over the long-term objectives. Achieving the short-term priorities first enables you to establish a good savings habit and learn how to control your finances.

Once you establish these habits using short-term priorities, achieving longer-term priorities becomes much easier or as my daughters say, “It’s easy-peezy”! 😊

A quick win breeds confidence which will enable other good things to happen. You’ll start to realize how easy it becomes and makes your longer-term priorities seem attainable.

#3 – Choose A Budgeting Method

You may be asking yourself, “why do I need a budgeting method, I already created a budget”!

Hear me out.

What you did initially was create a baseline, a starting point. A budget is organic and moves around naturally over time as your needs and priorities change.

Now that you know where your money has been going and priorities have been set, it’s time to figure out how to achieve what you want. To do that, you’ll need to update the budget you initially created.

In other words, you’re ready to take your budgeting skills to the next level.

There are several ways to budget your money and knowing which method is best depends on your personality and needs.

I talk a lot about different budgeting strategies here:

Different Strategies For Budgeting Your Money

I’ll cover a quick highlight of some common types:

Zero-Based Budget

This method entails getting your income to equal expenses + savings. The main objective of this method is to assign every dollar you earn a job. Even if you have a buffer for unexpected expenses, that’s ok. This is a job too and a good one.

Envelope Budget

This budget entails doing all your budgeting using cash. With this system, you literally assign all your money into categories, put the appropriate amount in a physical envelope, and draw from it (and ONLY from that envelope) to pay the assigned bills.

Envelope Budgeting Method     

For example, you can assign an envelope for the car payment, rent/mortgage, utilities, groceries, etc. You can even assign an envelope for savings and miscellaneous expenses.

This strategy works great if you need to physically touch the money and see it being spent to stay disciplined (i.e., like my wife 😊).

50/30/20 Budget

This budget type consists in breaking down your expenses into three categories: needs, wants, and savings/debt repayment

You assign 50% of your budget towards needs, 30% towards wants, and 20% towards savings / debt repayment.

I talked about this method exclusively here:

How The 50/30/20 Budget Rule Works

What I Recommend

IMO, if just starting out, I recommend trying the zero-based budget first. Every dollar has a specific assignment, and you know at the end of the month there should be zero leftover.

However, if it doesn’t seem to work for you, try doing other methods. The key is to find the method that works well FOR YOU.

For example, we use a hybrid approach of the zero-based and envelope methods. Why? Because it works for us and our needs.

#4 – Create A DRAFT Of The New Budget

Now that you have done some of the leg work and found a budgeting style that works for you, it’s time to create a draft of your new budget.

With any budget type you choose, leave some room for the unexpected expenses that occur from time to time (I prefer to call them “oopses” 😊lol).

How To Create A Budget

In this phase, layout your new budget with the method you chose and look for any money leaks that you can plug.

For example, do you tend to eat out a lot? Maybe start cooking some of your own meals. Do you spend a lot on entertainment? Maybe look for other more inexpensive ways to have fun.

I talk about that here:

10 Ways To Have Fun On A Small Budget

6 Ideas To Vacation On A Budget

Like I said above, a budget is organic and free flowing. During the budgeting process, you are homing in and assigning $$$ on what REALLY matters to you.

#5 – Track Progress

Maybe it’s the project manager in me, but tracking your progress now becomes paramount.

The reason for this is two-fold:

  • Monitoring your progress reinforces how much better you have gotten since you started.
  • Tracking progress looks for flaws in the plan and identifies how to fix it.

Like my old director used to tell me, “you can’t fix anything if you don’t know how to measure it”.

I recommend spending an hour or so per month for the 1st 6 months tracking progress. This will get you in the habit and you can use it to learn from any mistakes made.

After that, check your progress quarterly. After 6 months or so, you have gotten a lot better at budgeting so if you choose to delay when you review the budget, that’s fine. If you like to review it monthly, keep you doing it!

Remember, do what works for you.

#6 – Refine As You Go

Even the best laid out plan will come across unexpected occurrences.

You need a new transmission (ouch!). You have an unexpected medical bill (been there!). A big expense you forgot to include in the budget suddenly becomes due (been there and done that!).

Whatever happens along the way, just treat it as a learning experience and keep refining the budget as needed.

It’s a lot like a scene from the movie, “Zorro”, with Antonio Banderas. In it, Antonio is being trained by the original Zorro how to sword fight. They stand in the middle of a platform which has several circles inside each other much like a bullseye target.

Budgeting Methods and How To Implement

The original Zorro explains that we will train in the outer circle first. As you get better the circles become smaller.

Creating a budget is very similar. You won’t get it completely right the first time. As you get better and receive more data, you will refine the budget as you go making it more and more accurate.

#7 – Practice Patience

This is probably THE most important step. A lot of people try to start a budget, struggle, fail, and then give up never to try again.

Be realistic with both your expectations and your progress. It will take you weeks, maybe even months to become good at it.

Accept that mistakes will be made. Learn from the mistakes and continue getting better.

Don’t be hard on yourself if you struggle because we ALL have struggled. The trick is to keep on working at it.

Also perform checkpoints every 6 months or so to both see how your plan is doing and if your priorities have changed.

Remember a budget reflects your priorities. If your priorities change, the budget needs to change too. Change is a part of life. 😊

How To Get Started

If you need help to get started, I developed a FREE tool for my needs that not only creates a budget, tracks it, but it also ties it to my retirement goals as well. It tracks my budget, available cashflow, how much I need for retirement, and much more.

If interested, go to the link below and look for the spreadsheet at the bottom of the page:

Free Budget Tool

Look for this:

How To Start Budgeting

Although it may seem initially daunting, budgeting your money doesn’t need to be difficult. With practice and over time, saving up for your short-term and long-term priorities will seem effortless.

The best part is that it usually only takes a few tweaks to your money routine to achieve what you set out to do.

Budgeting For Beginners

Budgeting is an essential part of a healthy financial life and will allow you to ensure the things that matter most to you will be taken care of.

Just remember the most difficult part is getting started and not being too hard on yourself. Keep working at it and before you know it, your dreams WILL come true!

Live The Life You Love, Want, And Deserve! 😊


Did you enjoy today’s article? I’d love to hear from you.

Post your comments here.


Did you like what you read about today? Do you have ideas for future blog posts? I’d love to hear your comments.


Come follow me on Pinterest to review my latest articles and so much more!


Want to join my newsletter? Click here and go to the bottom of the page to sign up.