Are you ready to learn how to make a budget? Although people usually think of a “budget” as restrictive, it’s actually incredibly empowering. If you’re ready to take control of your spending, save money, or pay off debts, there’s nothing more helpful than a budget.
Understand your current spending.
I have an awesome friend who performs a thorough end-of-year spending review each year. Despite living on a tight budget, she maintains a meticulous budget of all of her expenses and even manages to save for frequent Disneyland vacations!
Her budget planning begins with an annual review of her entire year’s expenses. She inputs everything into a spreadsheet, where she calculates the total amount spent on bills, gas, food, personal and household expenses, and more. This helps her understand where her money goes so she can manage it better.
Wondering how to make a budget? These online services make it easier.
Of course, aggregating all of your annual expenses into a spreadsheet can be a long, tedious project. It isn’t something that everyone can do.
However, there are several online services that make this process more convenient than ever before.
BudgetSimple is a free online budgeting tool that analyzes your past spending and suggests where you can cut expenses. It’s an easy-to-use budget planner.
Buxfer is a great option for people with roommates. If you split bills with other people, Buxfer makes it easy to divide those costs and settle up any IOUs. The basic account is free. For $1.99 per month, you can enable automatic account syncing.
Mint.com is a free budgeting tool that will provide this analysis for you. If you link your account, it will analyze your transactions and crunch the numbers for you.
Search for money-saving opportunities.
Once you can clearly see where you’re money has been going, you can look for ways to save money on those expenses. It’s important to be realistic when you’re planning your expenses, so don’t cut back so much that you’ll be miserable and unable to stick to your budget.
Rent is an expense you usually can’t negotiate. You may be able to get roommates, but that can make things complicated.
Many people have found that mortgages are cheaper than rent. We’ve found several ways you can get down payment grants and other help buying a house!
Power bills are often the second-biggest item in a low income household’s budget, especially during summer and winter. Find out how we reduced our bill from $600 per month to just $150 per month with $18,000 in FREE home improvements!
Internet is another bill that you may be able to reduce. If you’re paying $20 or more per month on Internet, check out our list of a dozen low income Internet programs. Some are even free!
Cable & TV Service
This is expensive, which is why so many families are cutting the cable. Our family discontinued TV service in 2012. Now, we rely on streaming services like Amazon Prime and Netflix. When we can’t find our favorite shows there, we buy the series on iTunes – and it’s still cheaper than cable!
Cell Phone Service
Cell phones can cost hundreds per month. If you meet low income guidelines, you may qualify for a free smartphone and a free cell phone plan (including data). Pick from this list of providers!
Transportation can be extremely expensive. We’ve found ways to save money on vehicle registration, insurance, gas, and even bike shares!
- 15 tips to save money on gas.
- Find out how we were able to get free vehicle registration for LIFE!
- We found low-cost auto repair and evenfree cars for veterans.
- Do you rely on bike share programs? You might be able to ride for just $5 per YEAR!
If you have student loans, your minimum payments can be a real budget-buster. Make sure you’re not paying more than you need to with these tips.
- You may qualify for $0/month student loan payments.
- Disabled persons can get total student loan forgiveness.
- You may be able to stop garnishment of your wages and taxes!
Food can also be a major household expense. Keep it cheap with these helpful tips:
- Do you qualify for more food stamps money?
- Get free farmer’s market produce.
- You can also get free food in the summertime.
- 10 tips to save money on groceries.
- Focus on making cheap, healthy meals.
- Try these authentic restaurant recipes instead of eating out!
Some things can be cheaper if you make them at home. Check out these relevant articles:
You can also get cash back from your purchases of food, household goods and more when you use the Ibotta app!
Project your future spending based on this information.
Now that you have an accurate idea of how much you’ll be spending on your expenses, you can design a budget. You can do this in a spreadsheet or by using the free budgeting tools we referenced above.
Many well-known financial advisers recommend a budget plan like the 50/20/30 rule. This rule states that you will spend 50% of your after-tax income on necessary living expenses, 30% on wants and the remaining 20% on savings.
However, that’s unrealistic for most of our readers. In fact, many of us are lucky if our income meets all of our necessary living expenses without wants or savings included.
For years, My personal budget is a simple spreadsheet that lists my expenses in priority order. That way, the most important expenses get paid first (before the money runs out). I start with housing, then transportation, and then bills (like internet and cell phone service). After that, I list the household expenses (like food), savings and wants. You can download my Sample Budget Spreadsheet here.
Find opportunities to increase your income.
Budgeting can be depressing, especially when you know you don’t have quite enough money to go around.
If you’d like to put more money in your pocket, check out these resources:
- 30+ smartphone apps that make easy money
- 12+ side hustles you can start today
- 3 tips to nail your next interview
- Veterans, claim IU to get 100% compensation!
If you’re interested in writing for money, you can check out these 5 sites that will start paying you today – or you can learn how to set up your own niche website! If you stop by SkilledBlogging.com, I’ll teach you how I make money by running Low Income Relief!
The hardest part is sticking with it.
The hardest part of budgeting is sticking to it. For the first several months, you should revise your budget so that it is both realistic and productive. It may take some trial and error to develop a budget you can stick to.
Here are some tips that can help:
- Be realistic! Don’t try to confine yourself to ridiculously low expenses that you can’t realistically stick to.
- Keep yourself accountable with an accountability partner. It can be a roommate, a friend or a coworker. Find someone you can be open and honest with about your attempt to stick to a budget.
- If you make it through the month, reward yourself for sticking to it. This can be as simple as setting aside time to watch a certain TV show or do something you love. It doesn’t have to be expensive.