There are plenty of reasons why you may want a budget. From simple financial consistency, to saving money each month, budgeting can benefit you in many ways. Of course it pays to have some guidance, whether you’re trying to create a budget for the first time or you’ve attempted a budget before.

Many adults struggle with developing a budget, and for a variety of reasons—not knowing where to start is a big one. If you create a budget without taking the proper steps, you’re setting yourself up for inconsistency and failure. No one wants that! With that in mind, here’s a few tips for beginner budgeteers.

Figure Out Your Income

Before you do anything else with your budget, you need to know what you’re working with! Calculate your monthly income, and be sure to include everything. For many of us, this is as simple as writing down your regular paycheck (written twice if you are paid twice a month). However, if you’re a business owner, receive extra money regularly, or make additional income from side work of any sort, be sure to add that as well!

Figure Out Your Expenses

Next, you’ll want to calculate your total monthly expenses. This includes all of your bills, of course, alongside whatever you have to spend each month on: gas, groceries, loans, gym memberships, and so on. When it comes to calculating out a monthly average for bills that fluctuate (electricity, water, gas, etc.), be sure to round up! Find the highest bill you’ve had, and add a bit to that to give yourself some wiggle room. This way you’ll never find yourself short, and you’ll end up with some extra money on months with a lower bill.

Set A Goal

It always pays to have a goal to work towards – so give yourself one. Your financial goal will depend entirely on you, but before you add extra lines to your expenses (for, say, going out to eat, buying new clothes, or stopping by Starbucks every day before work), consider what you’d like to save up towards. This might be paying off a loan, building up an emergency fund for several months in case things go south, or saving up for a down payment on a new house or car. Having a strong financial goal will help to keep you on track – and keep you from overspending on everyday indulgences!

Limit Or Plan Out Optional Expenses

Entertainment, new clothes, eating out for lunch every day – optional expenses are expenses that you may have, but aren’t essential. When you’re developing your budget, and especially when your goal requires you to put money back that you’d otherwise be spending, it’s important to decide how much you want to spend on extra stuff every month. Even more important is knowing that, for most of us, it is possible to strike a balance between enjoying yourself and saving up for the future.

Give yourself a weekly or monthly allowance based on how much extra income you have left after your necessary monthly expenses and how much you want to put back for your financial goals. Then stick to it!

Budgeting doesn’t have to mean pinching pennies or giving up your daily comforts in exchange for financial security! Done right, a budget can give you peace of mind and make you more confident in your spending habits. Stop wondering if you’ll be able to pay your rent next month, and start budgeting!

Budgeting for Beginners