Budgeting: Creating a Plan for Your Money


        I know, I know...most people hate budgeting but unfortunately it is a necessary evil; especially if you want your money to eventually work for you and not just you working for it. But the ‘budget’ doesn’t have to have a negative connotation if we just change the way we think about it.

        Creating a budget does not mean that you have to restrict yourself from everything you enjoy in life. A budget is simply an estimation of how much money you think you will earn and ultimately spend during a period of time.

Every Dollar Should Have a Job

        The purpose of the budget, in reality, is to help us create a plan for our money. It would be nice if we all could have infinite amounts of money to spend as our hearts desire but realistically for most of us this simply will never be the case. Therefore, it’s a good idea for us to ensure that what we are doing with our money, whether we are saving it, paying off debt, investing it, or simply paying our monthly expenses, is done with a purpose and a plan in mind to help us avoid overspending and ultimately living paycheck to paycheck.

        Every dollar that you earn should have a job to do. Paying your rent/mortgage, utilities, car note, buying groceries, your personal grooming routines and even a fun night out with friends should all be included. I know you’re probably thinking why on earth would I include fun into my budget? But trust me it is important to budget/plan for things that ‘brings you joy’ as Maire Kondo might put it or else you may be setting yourself up to fail.

Don’t Forget to ‘Treat Yo Self’

        Think about it; why do most people fail at their first few attempts at dieting? Mostly because they overly restrict themselves of all the things they like until they reach their breaking point and overeat on a cheat day or when life gets too stressful. The same thing can happen financially if you aren’t allowed to ‘Treat Yo Self’ every now and again (shout out for any Parks and Rec fans). The last thing we want is to ruin our budgets by overly restricting ourselves. I guess this was a long way of saying you don’t have to cut out all fun when budgeting just be sure to include it in the plan. 

So How Do I Get Started?

        So, now that we agree that we should have a budget (or at least I hope we agree) what’s the next step? Actually how do you get started? Well, first thing’s first. We can’t make a budget until we learn where our money is actually going. To do this we have to track our spending.

        There are different ways to track your money but the point is to figure out how much money you’re bringing in and how much money is going out and on what. Log into your bank account, go ahead I’ll wait...just kidding, but seriously log in. Pick a date range, a month is usually a good start, categorize EVERY purchase/payment made no matter how small during that time period and add up the total.

        Some banks have features to do this for you so you won’t have to do this manually. And of course, there is always an app (like Mint or You Need a Budget, YNAB; I personally use my bank to track my money and I have not used these apps but I have included links below that review the pros and cons of these apps and others that you may find useful).

        Basically, the point is you need to know where your money is going and you won’t truly know until you sit down and figure it out. Trust, where you think your money is going and where it’s actually isn’t always the same.

You won’t truly know until you track your Spending

        In an effort of full transparency, a year ago if you asked me how much money I spent a month on food (including groceries, fast food, restaurants, etc.) without hesitation I would have said probably around $150 to $200 tops and I would have honestly believed that. But when I set down and actually started tracking my money it turns out I was spending over $500 a month on food easily! (To help put that into context I live alone and I don’t have kids) Eating out, ordering in and meal delivery services were draining my pockets. And I wouldn't have realized until I tracked my spending.

Simple Sample Budget

        I’m creating a simple sample budget below to help illustrate the importance of tracking your spending to help create a budget. For the sake of this budget I will keep line items basic/broad and we will work under the assumption that the person in this sample budget brings home $1500 a month.

         In the example above we can see that this person spent $125 more than they brought home that month meaning that it would be beneficial for this person to re-evaluate their spending and make changes to help get their expenses down (finding cheaper or free activities for entertainment, eating out less, looking for cheaper options for things they need i.e. you don’t always have to buy name brand) or take steps to help increase their monthly income (get a side job, a better paying job, or work towards getting a promotion).

        Basically the bottom line here to creating a budget is to figure out where your money is actually going. This way you can create a plan for where you need to go (bills, paying off debt) and where you want your money to go (savings for emergencies, a major purchase, investing in the stock market or more importantly yourself) to help put you on the path to reaching your financial goals.


If you liked this article be sure to join my e-mail list. You can also follow me on Twitter and Instagram. Let's connect and keep the conversation going!  



  1. Budgeting can be so daunting but as you mention it is a necessity becaise we need to keep track of how our money is coming and going. I recently started budgeting more seriously and has been such a great help.

    Thanks for sharing

  2. Great post! I think especially tracking is so essential, otherwise you'll never know where the money is disappearing to!

  3. This is a great post - I always think we need to talk more openly about budgeting and spending habits. I love having my organised budget so I know where my money is going. Thanks for sharing your tips!
    Carrie xx

  4. I totally needed this especially since I will be getting terminated from my job in 2 weeks. I definitely agree, it is a necessary evil, lol. Thanks for sharing!
    -Every Blogging Thing

  5. I love budgeting... lol I know this sounds weird, but once a month I track my expenses, add up all of them then look and income and measure how much I was able to save and project future savings. I love doing this because it helps me feel in control of my finances.

  6. Having a budget is so important! I tracked every penny for a couple of years before going to a percentage-based method which works amazingly- as beforehand I never knew how much I could spend on myself, but now I do! Thanks for sharing :)

  7. Great post - I get really anxious about money and my budget really helps me. I update it as I go along and it brings me a lot of relief to be able to see exactly where I'm at financially at any one time.


Post a Comment

Popular posts from this blog

Tackling Debt: To Snowball or to Avalanche that is the Question?

The Sunshine Blogger Award

How to Avoid Lifestyle Creep