Whether it is your first budget or your five hundredth budget, creating a solid budget can be a challenge. Having a process is very helpful. These 5 tips for beginning to budget are helpful for beginners as well as seasoned budgeters who are looking to improve their process.

desk with laptop and notebook

Living with a budget is a skill that takes practice. It can take three months or more to develop a rhythm to budgeting and start to feel like you have a handle of everything. Give yourself time and a little grace to avoid frustrations. You can do this.

Tip 1 – Have a sense of your monthly expenses.

If you are new to budgeting, you set yourself up for frustration without first reviewing what you have been spending each month. If you budget $200 for groceries for the month, but you usually spend $1,000, a week into the month you will have surpassed your monthly allocation for groceries and will need to make several adjustments to your budget.

paper with writing

When you first start budgeting, I recommended you review the last three months of bank/credit card statements and start tallying up the transaction you made and organize them into budget categories. This might take a while but it is a great activity to prepare you for budgeting. It will do two things. First, it will give you a good monthly average for most of your budget items. Secondly, it might surprise you and show you some areas that you can cut back on to free up money for items that are more of a priority to your financial success.

Tip 2 – Determine needs versus wants.

When I first started budgeting, I would list everything I want to do that month. The budget didn’t work because there was not enough income to cover everything I wanted to do. I know there are several items that I didn’t have a choice on. The mortgage, car insurance, gas, and electricity to name a few. But I found others that were more discretionary and the amounts weren’t set. Such as entertainment, eating out, and pocket money. Once I was able to completely determine needs versus wants, it made my budgeting and prioritizing much easier.

Tip 3 – When creating your budget, list the categories in priority order.

pen paper and cash

I find having some visuals very helpful. When you list the items on your budget in priority order, it will help to reinforce what items are needed over another. This allows you to ensure that the money is going to pay the items that are most important first. It will visually help to support your goals.

Tip 4 – Create your budget for each month, before the month begins.

Your budget should be forward-looking. It is going to help you control your spending to ensure that you have enough money to get through the month. If you don’t create your budget until you are into the month, you might have already overspent in areas that are going to cause you to be short in more important places. One thing I do when creating the next

month’s budget is to look ahead at the calendar. This way I can see if there are any things particular to that month that needed to be added into the budget, like a birthday gift or a trip.

Tip 5 – Update your budget at least weekly.

Every week(or more often) update the budget with the actual expenses that you incurred. If you use budgeting software like Mint, YNAB, or

EveryDollar, they will import your transactions from your bank to make it more efficient. You can also keep receipts or a little notepad to list your purchases and then update your budget accordingly. This will allow you to stay on track with the budget and make any adjustments you need as the month goes on.

calculator and computer

Time to get budgeting.

Use these 5 Tips for Beginning to Budget. When you start budgeting, it will feel like you got a raise at work. You will gain more control over your spending and be able to allocate more money towards your other financial goals. If you are married, you must work with your spouse to have the most success. As you consistently budget, you will gain efficiency and momentum. You will start to gain traction and move quickly towards your financial goals. Be encouraged, you can do this!


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