4 Simple Steps for Building a Budget

4 Simple Steps for Building a Budget



minutes read

A stack of us dollar bills on a table.

Depending on how you grew up and how you’re wired, the word budget either makes you want to run in fear, run some numbers, or run to the mall before it’s too late. But creating a budget is all about perspective. Start by viewing your budget as a tool to empower your spending and saving, rather than a weapon to destroy your fun. Next, get practical. Here are four simple steps to make it happen:

  1. List out your life.

Building a budget requires taking careful inventory of your financial life. First, list out your income. (This is the fun part.) Include everything from your paycheck or business income to allowance, gifts, and even that $20 from your sister’s I.O.U. Then, consider your expenses. Your cell phone bill, fast food splurges, school supplies, and the occasional movie ticket should all be included.


  1. Pay yourself first.

When building your budget, there’s one category that takes priority over all the rest. Think it’s food? clothes? How about those absolutely poppin’ new sneakers? Nope. It’s you. And by you, we mean your savings account. Before you fork over your hard-earned income to all the brands and experiences clamoring for it, prioritize your own financial future. Say it with me: pay yourself first! Then, when you’ve amassed enough money in your savings account, consider moving it to an investment that earns more interest.


  1. Check yourself before you wreck yourself.

Each week, sit down and see how you’re doing at sticking to your goals. Is your entertainment budget laughing back at you after your trip to the movies? Is your spending column having buyer’s remorse? Make adjustments to your spending to stay on track. If possible, seek out ways to make additional income. Your neighbor’s lawn could use a mow, after all.


  1. Hit the drumroll and grab the calculator.

Okay, you budgeting guru, you. The time has come for your hard work to be revealed. At the end of the month, open your trusty calculator app and run the numbers. How much did you spend in each category? Now, how does that compare to what you budgeted? If you stuck with your budget, give yourself a huge pat on the back. If you didn’t, ask yourself if your budget was realistic. If it was, make adjustments to your spending next month. If not, increase the category you missed and give it another shot.

For more on how to create a budget, here’s a dose of wisdom from Beauty and the Budget:

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