How to Make a Budget for Beginners (And Actually Use It)

Budgets. Those mysterious creatures that successful professionals are supposed to have mastered (but secretly haven’t). If you’re making six figures but still feeling stressed about money, or building a business while wondering where all the profit went – you’re in good company. And if you’ve thought “I should really get my finances organized” but don’t know where to start, you’re exactly where you need to be.

Here’s the truth: Being great at making money doesn’t automatically make you great at managing it. (Ask me how I know!) But even though budgets may not sound exciting, they’re your secret weapon for turning that hard-earned income into actual impact – and yes, maybe that dream vacation too.

In this post, I’m going to show you how to create a budget that works as hard as you do, and actually stick to it. No judgment, no complicated spreadsheets required (unless you’re into that sort of thing), and definitely no financial shame. Just practical strategies that help you tell your money where to go instead of wondering where it went.

This post may contain affiliate links. They don’t cost you a penny, but they provide a source of income for this website. For more information, please see my disclosures.

What is a budget?

Think of a budget as your money’s project management system. Just like you wouldn’t launch a major initiative at work without a plan, your finances deserve the same level of strategic thinking. As Dave Ramsey says, “A budget is telling your money where to go instead of wondering where it went.” It’s basically your financial GPS – helping you navigate from where you are to where you want to be.

And contrary to popular belief, a budget isn’t a financial straitjacket. Rachel Cruze puts it perfectly when she says that a budget gives you permission to spend. You’re the CEO of your finances, making intentional decisions that align with your goals, whether that’s scaling your business, funding your next career move, or finally booking that bucket-list vacation.

In this post, I’m going to teach you about zero-based budgeting (what Ramsey calls an “everydollar” budget). Don’t let the fancy term intimidate you – it simply means every dollar gets a job. Think of it like your team at work: you wouldn’t hire people without giving them clear roles and responsibilities, right? Same goes for your money.

Quick note on money partnerships: If you’re married, you and your spouse should be co-CEOs of your budget. Usually, it works best for one partner to draft the budget and then both meet to review and adjust – like any good executive team. If you’re not married, keep your finances separate from others – even if you’re engaged, living together, or in a committed relationship. Just like you wouldn’t merge companies without proper legal protection, you shouldn’t combine finances without the legal protections marriage provides. (My sister and I are roommates, and we each maintain our own budgets, even though we share certain household expenses.)

How Often Should I Make A Budget?

Just like you (hopefully) check your calendar at the start of each month or week to plan ahead, you’ll want to create a fresh budget before each new month begins. While you can absolutely copy over your regular expenses (like your mortgage, utilities, and subscriptions), every month brings its own unique opportunities and challenges. December looks different from July – think holiday gatherings versus summer vacations.

Pro tip: If you’re approaching a major life or career transition – like switching jobs, starting a business, relocating to a new city, or adjusting to a single income – create a “preview budget.” This means running the numbers based on your expected changes before making the leap. It’s like trying on clothes before buying them or testing a new app before subscribing – you want to make sure it’s going to work for you before committing.

Do I Need to Wait for the Beginning of the Month to Start?

Absolutely not! Start where you are – done is better than perfect. You’ll need to account for any expenses you’ve already paid this month (like catching up on last week’s receipts), but don’t let that stop you from taking control now. Even if you’re just a few days away from a new month, creating a budget for the remainder of this month will give you valuable practice and momentum for planning the next one.

Think of it like fitness – the best time to start isn’t January 1st or next Monday, it’s today. Your future self will thank you for starting now, even if it isn’t perfect.

How to Make a Budget for Beginners:

1. Choose a budgeting tool (your money’s “command center”).

Let’s set you up with the right tool for your style. Just like some people swear by Notion while others love a paper planner, there’s no one-size-fits-all solution for budgeting. There are many, many budgeting tools out there. Don’t get stuck here. Just pick something and start. If you don’t like it, try something different next month. You have a few options:

Option 1: Use a Budgeting App (I use Everydollar)

I’ve personally used EveryDollar since 2017, and it’s become as natural as checking my email. The perks? It syncs with your bank accounts (making transaction tracking much easier), does the math for you (no more spreadsheet formulas!), and travels with you everywhere on your phone. I use the web version for monthly planning and big-picture reviews, then the mobile app for on-the-go updates and expense tracking.

Option 2: Create a Budget Spreadsheet

If you’re a spreadsheet wizard, this might be your sweet spot. My parents swear by their Excel budget, and I use spreadsheets for my business finances. The advantage? Complete customization and control. Plus, spreadsheets never go out of style – they’re the little black dress of financial planning. To get you started, I’ve created a Spreadsheet-Lover’s Budget Template that you can download here. It has all the formulas set up and ready to go; you’ll just need to customize the categories for your life.

Option 3: Rock a Budget Planner or Journal

For those who think better with pen in hand, a physical planner might be your perfect match. My sister loves her Clever Fox Budget Book – it’s like a Moleskine specifically designed for your money. There’s something powerful about physically writing down your plan, and some people find they’re more mindful of their spending when they track it by hand.

Option 4: Keep It Simple With Paper and Pencil

Sometimes the simplest solution is the best one. You don’t need fancy tools to get started – a basic notebook can work just fine. While you’ll have to handle the math yourself, there’s zero learning curve. It’s like starting a workout routine with bodyweight exercises before investing in gym equipment.

THe Bottom Linke:

I love EveryDollar and think it’s especially great for busy professionals who want to automate the tedious parts of budgeting. But just like how some CEOs prefer whiteboards while others live in digital tools, the best budgeting system is the one you’ll actually use. Pick something and start – you can always upgrade or switch later.

2. List all of your income sources.

First, let’s get clear on all the money coming in. This might be more complex than just a single paycheck, and that’s okay – we’ll organize it all. Start by listing all of your sources of income in your chosen budget tool.

Types of Income to Include:

• Regular salary or hourly wages (use your take-home pay)
• Business owner’s pay (your actual draw or salary, NOT your top-line revenue)
• Commissions or bonuses
• Consulting or freelance income
• Investment distributions
• Side hustle earnings
• Rental income
• Any other regular or irregular income sources

Pro Tip for Variable Income:

If your income fluctuates (hello, entrepreneurs, salespeople, and freelancers!), use a conservative estimate based on your past few months. I always recommend estimating on the lower end – it’s better to have extra money to allocate later than to come up short. Consider using your “minimum reliable income” – the lowest amount you typically bring in during an average month – as your baseline for essential expenses.

For Business Owners:

Keep your personal and business income separate. We’re focusing on your personal budget here, so if you own a business, use the amount you actually pay yourself (your owner’s draw or salary), not your total business revenue.

For Multiple Income Streams:

List each source separately. This clarity helps you make better decisions about which income streams to grow and which might need more attention.

Some budgeters find it useful to list their paychecks separately as well (paycheck 1, paycheck 2, and so forth) but this is completely optional.

3. Plan your giving

Remember the last time you were able to make a real difference with your giving? That feeling is what we’re aiming for here. Let’s be intentional about making an impact with your success.

If you’re working on paying off non-mortgage debt, your giving might be focused primarily on tithing right now, and that’s perfectly fine. Calculate your tithe (10% of your income) and enter it here. For business owners, this is 10% of your personal income (your draw or salary), not your total business revenue.

Pro Tips for Giving:

• Keep good records – this helps with both tax documentation and celebrating your impact.
• If you have variable income, budget based on what you know is coming in (with some degree of certainty, just like with your income in the step above), and then adjust your budget later when you get paid. You might consider setting aside your tithe when the money comes in rather than waiting until month-end.
• Some people find it helpful to have a separate “giving account” to keep these funds separate from daily spending, especially if you’re saving it for a larger or future gift.
• If your income is consistent, you can set up automated giving for regular donations just like you would for any other important commitment. If your church has a system like Tithely you can set this up through the church, or you can also usually set it up through your bank.

4. Create your categories.

Now let’s map out where your money needs to go. Think of these categories like departments in your personal finance company – each with its own role and budget. I’ll give you a starter list, but feel free to customize these to fit your life – and your desired level of granularity. (And don’t worry about filling in the amounts yet – we’ll get to that!)

Savings:

• Emergency fund (if you have non-mortgage debt, this is likely your only savings category for now)
• Sinking funds for known future expenses
• Long-term goals (once you’re debt-free!)

House/Utilities:

• Mortgage or rent
• Property taxes (if not escrowed)
• HOA fees
• Internet (because Zoom calls need to be crystal clear!)
• Phone
• Streaming services
• Water/Sewer
• Trash
• Gas/Electric
• Home maintenance

Food:

• Groceries
• Restaurants/Takeout
• Business Meals:
  • If you own your own business or have a company card to pay with, these don’t go on your personal budget. Pay for them through the business (and keep those receipts!)
  • If you get reimbursed by your employer for these, you’ll find it useful to track them separately in your budget so you can see if you’ve been reimbursed correctly.

Transportation:

• Gas
• Maintenance/Oil changes
• Parking (especially relevant for urban professionals) & Tolls
• Rideshare services
• Public transit passes

If some of these only apply to you occasionally, you can have a miscellaneous transportation line to combine a few of these categories.

Professional Life:

Note: if you own your own business, many of these will come directly from your business budget instead of personal.

• Professional development/Certifications/Continuing education
• Networking events
• Home office expenses
• Professional memberships
• Conferences

Lifestyle:

• Personal care
• Gym/Health club
• Entertainment/Fun Money
• Shopping
• Hobbies
• Travel
• Gifts
• Pet care
• Household supplies & toiletries (some budgeters include these in groceries instead)

Insurance:

• Renters or homeowners insurance
• ID Theft protection
• Car insurance
• Health insurance (if not through payroll)
• Life Insurance

Debts:

List each debt separately with minimum payments:

• Student loans
• Car loans
• Credit cards
• Personal loans
• 401(k) loans, IRS, etc.
• Any other debts

Pro Organization Tips:

• Group similar expenses together
• Create separate categories for anything you want to track specifically
• Make tax-relevant expenses easy to identify. If it’s something that requires more detail than just a receipt, you may want to keep a list (in a spreadsheet or document is easiest) with the necessary details.
• If you’re self-employed, business expenses should come out of your business budget, not your personal funds. (If your personal and business funds are intermingled, we’ll need to separate them. Book a consultation with me if you need help getting this sorted out!)

5. Fill In your planned amounts:

Now comes the part where we bring those categories to life with actual numbers. Let’s do this strategically:

Start with the Four Walls

Begin with your essential expenses – what Dave Ramsey calls your “Four Walls”:

• Food (groceries and basic meals)
• Housing (mortgage/rent and utilities)
• Transportation (basic car expenses or transit costs, including your insurance and your car payment if you have one)
• Basic clothing (work attire and necessities)

Remember: Focus on needs first; we’ll get to the fun stuff!

Next, Add Your Required Payments

• Minimum debt payments
• Insurance premiums
• Professional dues and required certifications
• Childcare if applicable

Pro Tip: If you’re looking at your minimum payments and feeling overwhelmed, don’t worry. We’ll work on accelerating debt payoff after we get your basic budget working.

Then, Add Your Goals Based on Your Current Baby Step

If you’re working through the Baby Steps, your priorities are clear:

• Baby Step 1: Put every extra dollar toward your $1,000 starter emergency fund
• Baby Step 2: After your starter emergency fund, every extra dollar goes toward your debt snowball
• Baby Step 3+: Now you can start adding in larger savings goals, retirement, kids’ college, etc.

Finally, Plan Your Lifestyle Categories

This is where you get to decide how to use your remaining funds for:

• Entertainment
• Shopping
• Personal care
• Dining out
• Travel
• Hobbies
• Other discretionary spending

Smart Planning Strategies:

• If your income varies, budget fixed expenses against your baseline income
• Use “extra” income months for accelerating goals or building buffers
• Consider setting up separate “fun money” accounts for guilt-free spending
• Plan for quarterly or annual expenses by setting aside money monthly using a “sinking fund.”

Remember: Your budget should reflect both your current reality AND your priorities. If something matters to you, make sure it has a place in your plan.

6. Balance your budget:

Now for the moment of truth: making your income minus your planned expenses equal zero. Think of this like reconciling your books – every dollar needs an assignment.

What Does “Zero-Based” Really Mean?

When you’re done, your income minus your planned giving, saving, and spending should equal zero. In EveryDollar, you’ll see a green “It’s an EveryDollar Budget!” message when you get there. Using a spreadsheet? The difference between your income and planned expenses should be $0.00. Using pen and paper? Time to bust out that calculator.

Important: This doesn’t mean your bank account will be empty! It just means every dollar has a job, like every member of a high-performing team.

If You’re Coming Up Short:

1. Review your “wants” categories first
2. Look for creative ways to reduce essential expenses
3. Consider ways to increase your income (overtime, side work, selling items)
4. Remember: Sometimes a temporary cut creates long-term freedom

If You Have Money Left Over: Follow the Baby Steps order:

1. Finish your $1,000 starter emergency fund
2. Extra to your debt snowball
3. Build your full emergency fund
4. Invest in retirement
5. Save for kids’ college
6. Pay off your home early
7. Build wealth and give

Pro Tips for Success:

• Keep a small buffer in your checking account ($100-200 to start) for unexpected transactions. You’re going to pretend this money isn’t there.
• If you’ve been running close to zero in your account, add a “Buffer Building” line to your first budget
• Don’t feel pressured to create the perfect budget on your first try
• Focus on progress over perfection

7. Put Your Budget into Action

Having a budget is great – but using it is where the magic happens. Let’s make this work in real life.

Track Your Transactions (Weekly Rhythm)

Build this into your regular routine:

• Set a consistent weekly money date (15-30 minutes)
• Review and categorize transactions
• Check category balances before major purchases
• Update any new income received

Pro Tip: Make it enjoyable! Pour your favorite beverage, put on some music, and celebrate your progress. This is your time to act like the CEO of your finances.

Quick Wins for Busy Professionals:

• Use your phone to enter transactions on the go
• Take photos of receipts immediately (especially for cash purchases) or keep them in a designated spot.
• Set calendar reminders for your weekly money date
• Link your accounts in EveryDollar to speed up transaction imports
• Keep all tax-related expenses clearly marked

When Plans Meet Reality:

Remember, your first few months won’t be perfect, and that’s okay! You’ll discover:

• Expenses you forgot about
• Categories that need adjusting
• Spending patterns you didn’t realize you had

Make Adjustments as Needed:

• Move money between categories as priorities shift
• Update your plan when new expenses arise
• Revise category amounts based on real spending data
• Always maintain your giving and debt payoff goals

If you’re married, coordinate with your spouse:

• Have a monthly budget review meeting
• Agree on spending limits that need discussion
• Keep communication open about upcoming expenses
• Celebrate wins together

For Variable Income:

• Budget based on your minimum reliable income
• Create a “holding tank” for extra income months
• Prioritize essentials first
• Have a plan for “extra” money before it arrives

The 90-Day Grace Period:

Give yourself three months to get into a good rhythm. During this time:

• Track everything, even if it’s not perfect
• Note patterns and forgotten expenses
• Adjust categories as needed
• Focus on building the habit

Remember: Every successful business had to adjust its projections and plans. Your budget is no different – it’s a living document that grows with you.

At the end of the month, make sure to finish tracking everything and make a new budget for next month.

Time to Get Started!

You’ve got all the tools you need to create a budget that works as hard as you do. Remember, this isn’t about restriction – it’s about giving yourself permission to use your money intentionally to build the life you want.

Your Next Steps:

1. Choose your budgeting tool (grab my spreadsheet template or download EveryDollar)
2. Set aside 30 minutes for your initial budget setup
3. Schedule your weekly money dates
4. Start tracking your transactions

Most importantly: Don’t wait for the “perfect” time or until you have everything figured out. The best time to start is right now, and I’m here to help you succeed!

Ready for Support?

Option 1: Schedule a Budget Deep Dive

Want to fast-track your success? In our 90-minute Budget Deep Dive session, we’ll create your personalized budget together, set up your tracking system, and make sure you have everything you need to succeed. Learn more and book your session here.

Option 2: Get Started with a Free Consultation

Not sure if coaching is right for you? Schedule a complimentary 25-minute consultation to discuss your goals and see if we’re a good fit. Book here.

You’ve got this! And remember – you’re not aiming for perfection, you’re aiming for progress. Take that first step today.

Option 3: Ask a Coach

If you just have a quick question, you can submit your question to a financial coach for free here.