How to make a budget(the easy way) plus essential tips on how to budget to save money

how to make a budget

Read this blog post to learn how to make a budget in 5 easy and simple steps to pave the way to be financially in control with your money

You’ve probably heard of the word budgeting and maybe how to make a budget,

Or maybe not.

But it didn’t seem important at that time because why the heck would you waste your time on something as boring as budgeting or learning how to make a budget

I remember the time I opened my first bank account, got my first credit card and started receiving funds

I was elated (for some short while that is)

Majority of us might have been in this scenario,

The month is still fresh but you can’t seem to remember how you spent all your money and it just happens to be that important bills were not paid.

how to create a budget

You scramble with what little money is left (if there is any) and try to make ends meet

You soon realize you’ve spent frivolously on things that you did not need at all

Your savings is on the verge of death or probably dead or nonexistent because of abandonment  

piggy bank

Trust me I’ve been there countless times in the past.

Budgeting”, the dreaded word. 

The first thing that might come to your mind is that your spending habit will be restricted and therefore that’s not fun. 

But the actual truth is that budgeting is fun.

It is best if you realize that knowing how you spend your money and being in control of your finances is fun because you don’t have to worry if you’re overspending or if you won’t have enough money by the end of the month.

Before you go any further, please download my super duper cool budget template with small illustrations to be one step closer in being in control of your finances

What is a budget?

According to Miriam Webster dictionary, “a budget is the amount of money that is available for, required for or assigned to a particular purpose”

 I.e. a budget is simply a list of all future planned revenues and expenses. 

It is a plan of how you save and spend in the future.

Note; A budget will only work if you’re truly honest with your income and expenses.

Why is budgeting important

Budgeting is important because 

  • It helps you properly target, track, and control the amount of cash you spend, save, donate, or invest.
  • budgeting also helps you stay financially organized
  • prepares you for any emergencies and steer clear of debt
  • Allows you to focus on your long-term goals.

Types of budget

When you think of how to make a budget, you should know some of the types of budget out there. 

Below are some types of budgeting plan that is widely used.

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types of budget

1. The zero-based budget;

This is simply a type of budget where all income minus expenses will equal zero. 

This does not mean that you don’t have any money left. 

It just means that every money down to a single penny would be allocated what they’ll be used for, be it normal expense, savings, debt, or towards investment.

2. The 50/30/20budget

This was popularized by Senator Elizabeth Warren in her book. The rule is to limit after; tax income your needs to 50%, wants to 30% putting away 20%on savings and debt repayments.

3. Pay yourself first budget

This type means saving before doing anything else with your income

4. The envelope system;

this is diving your cash for spending into different envelopes. So that when an envelope becomes empty, you’ll have to stop spending in that particular category

5. The spending first budget

As the name implies spending your money and saving only what is leftover

6. The no budget

This budget is as plain as it the name says, not budgeting at all. But it’s important to note that this plan will only be effective if what you earn monthly is highly greater than your regular expenses

How to make a budget (5 types)

how to create a budget

Follow this step to be more financially organized and in control.

1. Determine your income

This is the first step in making your budget. 

This is to determine how much income you have after-tax (if you pay tax) each month. 

Also note that in addition to your regular income, you should include any other sources of income you may have such as interest, a side business, and so on. 

This might not be the case if you’re someone that has an irregular monthly income.

 In this case, either use the minimum amount you receive each month or look at your income for the previous year and then calculate the monthly average.

2. Determine fixed and variable expense

Write down a list of all the expenses you expect to have during a month 

Now its time to determine the fixed and variable expenses

Fixed expenses: these are those necessary expenses that you pay the same amount for each time which includes;

You can include savings and debt repayment as fixed expenses if you plan to save or pay off a fixed amount each month

Variable expenses: this is those expenses that’ll change from month to month such as;

Assign values to your fixed expenses first then determine roughly how much you’ll need to spend per month on variable expense

3. Calculate the difference between your income and expense

This is simply subtracting your expenses from your income.

 You are off to a good start if your income is higher than your expenses.

This means you can put extra money into other areas like saving or paying off debt. 

But if your expenses are higher than your income, it means you are overspending, don’t stress over that too much because that’s the reason you started budgeting in the first place.

Simply find areas in your variable income that you can reduce spending like eating at home to reduce cost, 

Or you figured out you don’t need that new set of clothes that particular month. You’ll be surprised areas you can trim to fit your income.

 Aim to have your expense and income zeroing out, this means that every money is accounted for.

Note; if your expenses are far above your income then you may need to trim your fixed expenses or increase your income to balance your budget.

4. Determine what to do with savings

You don’t just aim to save; you should have goals for your savings. 

 Maybe you’re saving to pay off debt or just keeping it as an emergency fund or you’re saving for a vacation or a particular event. 

Just have a goal because it will keep you motivated to save.

 A good way of saving is to target a particular percentage of your income, 10% or lower, and then grow your savings over time. 

you can easily set this up by connecting your bank account to an app. This way a particular percentage will be saved automatically.

A very easy and stress free way i do this is by using piggy vest.


the good thing about this app is that you receive a percentage of interest with your money just sitting there.

5. Look ahead and make it a habit

This is where most of the work comes in, making it a habit, and sticking to it.

After learning how to make a budget and creating one, don’t just toss it aside, aim to stick to your budget by reviewing it every week or 2. 

This helps you understand, track your spending and keep you from overspending

You should have in mind that doing this will help keep your expense equal to or lower than your income.

 Download the monthly budget template


Tips on how to budget

1. Live within your means:

don’t compare yourself with others because you don’t know where they’re getting their money from and how the financial knowledge they have. 

Try not to spend the money you don’t have on items you don’t need.

Have in mind, it’s better to look broke and have something in your account than look fabulous and be completely broke (which is kind of how the society is nowadays)

2. Pay your bills first

As soon as you get paid or you get some money, pay your bulls first then you can play around with the money you have left

3. Have a plan for your money(write out your need and wants)

This way you know your priorities.

4. Do your research

Know where you can get the best deals of things when you don’t have the money so that when you do have the money you know exactly where you can get it without overspending

Know that every month is different and always try to Budget before the month ends

5. Track your expenses

Keep track of your expenses to avoid overspending and going over your budget.

If your budget becomes higher than your expenses, budget toward saving goals before you increase your spending 

Have an emergency fund

A little tip to help you save more is to DIY as many things as you can. 

YouTube is one of the best platforms that show a wide variety of DIYs. Utilize that.

read also: productive things to be doing ; step by step guide to design a better life

What is a sample budget? 

A sample budget is simply a budget from another person that you can look over to help you create your budget

Are you in control of your finances or are you just getting a wing of how this all works

Always have in mind and know that every month is different.

Were you currently using the no budget plan? Comment below




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Disclaimer:this post contain affiliate links and i might receive a small commission if you purchase a product with one but with no extra charges to you


    • i would suggest using the zero based budget first for beginners and if you don’t trust yourself with your money then you can combine it with the cash envelope system


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