Beginner’s Guide: How to Create A Budget

create a budget

Yes, everyone should know how to create a budget.  So get out your paper & pen and get ready to create a budget!

Budgeting hasn’t always been a priority for me, but then again I’ve ALWAYS kept my spending habits in check.  For the most part I didn’t need to update my budget every month.  It was more of an annual thing for me.

The additional times I might have calculated my expenses involved a move or a job change.  It was more so the big expenses that mattered to me.  If anything else changed, it was on a minor scale and well I didn’t worry too much.

For most people this system doesn’t work.  That’s okay and it’s actually wise to have a monthly budget.  How else will you reach your financial goals in time?

Without a written record you might not have a clue. Budgets give you a clue, but they’re actually better than that.  Your budget will help keep you on track and help you succeed in these personal finance goals.

Got your pen and paper handy?  Let’s get started on “The Budget”.  Trust me this money exercise is not a going to take long or waste your time.

Yes, it requires some of your time.  But assuming you’re organized enough, tracking down expenses will not be a burden.  Think of it as an investment in your future, because that’s exactly what it is.

You can create a budget of your very own!


Be sure to write your name at the top of the paper; just joking.  Write “The Monthly Budget”.


Create two columns.  In the first column write out your individual expenses and in the second list the corresponding dollar amount next to each expense.


Skip a line under the dollar amount column.  Now calculate & write in your grand total in expenses.


At the bottom of the page write out “Income” and write the dollar amount associated with your take home pay.


Next write “Total Expenses” under income and write the dollar amount you just wrote for your grand total in expenses.


Subtract the “total expenses” from your “income” and you have your balance.


Hopefully you have a positive balance, because then you can save and invest money from the balance.  If it’s a negative balance, then you’ve got some work to do.  Your next step would be to turn that negative balance into a zeroed out or positive balance.

Cut or decrease expenses when and where you can.  Try negotiating prices on necessary bills.  Find money from last month or even see if you can pull money from next month.   But if the negative balance isn’t an irregular thing, you need to do ALL that is needed to get your budget in check.

And you’re done, hopefully.

That wasn’t so difficult was it?  Now that I’ve made you write it all out I’ve got something to share with you.

It’s my FREE monthly budget sheet printable.  I know what you’re thinking.  Why didn’t I tell you about this in the beginning?the dancing dollar - free budget sheet

Well, because I think it’s good to know how it’s done and now you do.  Don’t you feel accomplished?  You should.  But to save time and make sure you don’t leave anything out click HERE for the My Monthly Budget worksheet. (Make sure to print off a few extra copies for the following months.)

It’s a beaut’, so check it out and print it off to experience professional level budgeting.

Happy budgeting!

Comment: Do you budget?  If so, why do you love or hate it?

Tawnya is the founder of The Dancing Dollar, a blog about frugality & personal finance.  She writes about how frugal living can help other individuals & families live [happily] below their means.  She & her husband are on the path to pay off their home in less than half the time.  Click here to learn more.