But what is budgeting?

How do you budget?

For beginners, this can be a daunting task, but these tips for budgeting for beginners can take all the mystery away from this concept and make it a functional part of your daily life.

A budget does not have to be something that is scary.

In fact, it should be something that makes your life easier.

Since there is no one perfect way to create a budget, I am going to share some great tips that will make it easy for a beginner to build a budget that works best for them.

The key is learning how to fit a budget into your lifestyle. Not trying to fit your life into someone else’s budget.


Beginner’s Budget Starts Here

Learn how your income and expenses work for you.  It’s easy for some to say that a budget is simply a list of income and expenses, but since every family has a different set of income and expenses you have to learn how those work for you.

To begin using a budget, you do need to do a few simple things that can make it easy to see where changes may need to be made.

To help you get started, please print out this template (click here) for yourself

  • Create a list of all monthly income. This should include your wages from jobs, child support, rental income, and anything that is a consistent source of income.  It should even include things like the $50 per month your friend or family member pays to be on your cellular phone plan.
  • Create a list of all necessary monthly expenses. This list should include the basic expenses that must be paid each month. Things like rent, electricity, gas, water, garbage, credit card debt, student loans, personal loans, groceries, transportation expenses, savings accounts, and medical expenses are a must. These items are the things that you cannot go without paying each month without dire consequences. Yes, savings is a must to keep you out of debt.
  • Create a list of all of the extra expenses you have regularly. This list will include things like dining out, entertainment, splurges, morning coffee, lunch out with friends, new shoes on sale, and similar things you may find yourself spending money on regularly. It will also include things like cable or satellite television and for those who don’t use the Internet for business purposes, the larger Internet plans or phone plans.

For those who only use their phones for occasional messaging, can easily cut back on that plan to build more room into a tight budget.

Again, think about your life and your needs.




Create a functional expense spreadsheet. Budgeting for beginners is all about getting real about your expenses. We’ve already touched on this some, but the real focus of creating a functional expense spreadsheet is to account for those things you absolutely have to manage to pay each month, and then allow yourself a specific amount to spend on other items each month as your budget allows.

Listing out your expenses in columns helps to see how things all into categories in your budget.

  • Housing includes:Rent/Mortgage, homeowners insurance, POA dues, and repairs
  • Utilities includes:Water, gas (heat or cooking), electricity, and garbage pickup
  • Transportation includes:Car payment, car insurance, gas, and repairs
  • Medical includes:Insurance (health, life, vision, and dental), prescriptions, and co-pays
  • Debt includes: Student loans, credit card debt, and personal or bank loans
  • Household includes: Groceries, toiletries, and services like lawn care
  • Communication includes: Cellular phone, home phone, and Internet
  • Entertainment includes:Satellite, cable, Internet upgrades, date nights, subscription services, streaming services
  • Wardrobe includes: Uniforms, replacement clothing, and replacement shoes for all family members.
  • Childcare includes: Babysitters, daycare, nanny, after school care, or parents night out programs
  • Savings includes: Emergency fund, vacation fund, and retirement funds
  • Miscellaneous includes: Splurges for lunches out, after school treats, or extracurricular expenses




If you are living within your means already and simply want to understand how a budget helps, the extra little expenses may not be as tough for you to manage, but you do need to be able to understand that your income should be primarily dedicated to the necessities.

You also need to see where you should make changes to allow more money to go into savings.

Ideally, your budget will reflect a balance leftover each month after all of your expenses that can then be used to pay down debt and save for the future.

I also recommend the concept of PAY YOURSELF FIRST. This will help you to continue to build your savings account and eliminate unnecessary expenses.

Adjust your monthly expenses to match your income.  Budgeting for beginners is all about understanding how your money works for you.  After you have listed all of your income and expenses and find that you are either living within or outside your means, it is time to adjust your monthly expenses to make the most of your income.

  • Focus primarily on lowering expenses to funnel more money into debt repayment and savings
  • Remove splurges or wants and focus on needs instead
  • Consider adding additional part time jobs for added income to negate expenses
  • Utilize savings options available to you to lower expenses

These are basic tools to help you adjust your monthly expenses to be within your monthly income.

By using simple tools like living more frugally, or adding an extra source of income, you can easily create a budget surplus that can pay off your debt and put more money into your savings accounts.

After you have taken a look at all of your income and expenses you may be considering adding extra money so that you can begin to save more each month. Budgeting for beginners is all about learning to understand how income and expenses work for your family.

Financial Goals Template