5 Steps To Budgeting Your Money

It’s happened again; you just went on an epic shopping adventure, got a bunch of cute clothes, went out to dinner with some friends, and now you’re completely broke. You’re probably thinking to yourself, “if I had a budget, this would never have happened!” But if you don’t know the first thing about budgets, where do you start?

Below are five steps for budgeting your money, from the before you get it to the moment you buy that awesome pair of boots you’ve been wanting for months.


1. Know where the money’s coming from.

First, you have to know how much money you have. How much is in your checking or savings accounts? How much do you get on your paycheck? Figure out, as close as you can, how much money you get each month, from where, and at what times.

2. Know where the money’s going.

Next you need to understand where your money is currently going to. Track your spending for a month and categorize each transaction according to what you buy.

For example, you could separate everything into the categories of food, clothes, home supplies, and cash withdraws. If you’re a student or require things for work, make another category for work/school supplies.

3. Determine where you want your money to go.

Now, decide what you want to do with your money. If you want to save up some money for a car, or you need to pay off your student loans faster, or you’re not putting aside enough money for rent, then you need to make the firm decision to cut back spending in other areas to make room for more important things.

4. Get down to business.

Now it’s time to make the actual budget. According to how much money you have, how much you normally spend in different areas, and how much you need to set apart, write up a set of limits for each area. For example, you could decide to spend only $250 on food each month, that’s a little more than $50 a week.

5. Set up a system

Now you need to set up a system to track your spending and let you know if you go over budget. You can use a spreadsheet, if you know how to use Excell or a similar program, or you could buy a home budget program like Quicken that automatically tracks your spending.


Here is a sample budgeting spreadsheet. To use, enter your bank account balance on the first of the month then add every transaction you make into its proper category. The rest is calculated automatically.

Congratulations! Now you know how to budget your money! Comment below to let us know if it worked for you!