If you’re like most people, then you probably don’t have a very good budget in place right now. Most of us tend to wing it when it comes to our finances, which is bad news. If you don’t know how much money is coming in and going out, then you won’t be able to pay your bills on time. You might also struggle to put money aside for the things that you truly enjoy.
Do you want a fail-proof easy beginner budget plan so you can get your finances in tip-top shape, but you’re too much of a beginner to know where to start? You’re not alone. But, if you’re willing to work at it, you can easily learn how to make a fail-proof easy budget plan and stick to it. In fact, budgeting doesn’t have to be hard. Here are 7 simple steps to creating your own easy beginner’s budget plan: 1. List out all your income 2. List out all your expenses 3. Subtract your expenses from your income 4. Whatever is left over is your income for the month 5. Make a list of all your expenses
How to make a simple budget plan for beginners in 7 easy steps
One of the questions I am often asked is how to create a simple budget plan. If this is new to you, it’s best to start with a budget plan for beginners right away. This is the first thing on your financial to-do list, and you should do it religiously at the beginning of each month. This is especially important if you have financial goals, such as. B. Reduce debts, achieve financial freedom, own your own home, start your own business, or be able to pay for your children’s college education. I know. I know. It may seem daunting, but it’s an important first step on your financial journey. Don’t know where to start? No problem. Learn how to create a simple budget plan for beginners, even if you’re tight on cash or living from paycheck to paycheck. They got it! This post may contain affiliate links. This means that I can receive a small commission if you make a purchase through the relevant link (at no extra cost to you!). For more information, see our complete information. You count the days until you get paid. They live from paycheck to paycheck. You feel like you’re in over your head with bills and payments every month, and you have no real plan for the future. If this sounds like your life and you’re ready to take control of your financial life once and for all, then you’re ready to start budgeting for beginners. You know what they say. The first step is admitting you have a problem.
What is a budget plan?
A budget plan is about telling your money what to do. This way you can take control of your money instead of letting money control you. You know what I mean? A budget plan is the process of determining exactly how much money you have coming in, how much money you are spending, and how you are spending it. A good budget is one where your income is greater than your expenses, and that’s what we’re going to try to do.
Why do you need to follow certain steps when creating a simple budget plan?
Why the budget? Of course, be organized! Budgeting eliminates the guesswork involved in monthly bills, as it is a form of monthly financial planning. Being organized means never defaulting, never spending more than you earn, being able to manage your debts and saving more money. Creating a simple budget plan for beginners will help you keep your numbers (income and expenses) under control. You can’t change your fixed costs, but a budget with all the numbers in one place can help you re-evaluate your spending and spend every dollar in the best way possible. A beginner’s budget also allows you to prepare for financial obstacles that may arise. It goes without saying that budgeting is very important. Related items: How to stay within your budget with a financial envelope system (+ free financial envelope templates) The best money envelopes to avoid overspending (+ free printables) 7 best budget planning notebooks to help you get your finances under control A comprehensive guide to zero-based budgeting Before you start budgeting for beginners, get this FREE printable budget kit to simplify each step, stay on track, and stay on budget!
How to make a simple budget plan for beginners in 7 steps
Here are the steps to learning how to make a budget plan for beginners.
Budget plan for beginners step 1. record all your expenses
Your costs include everything you have to pay each month. It might look something like this:
- Mortgage/rent – 2500
- Student loan – $1,000
- Minimum payment by credit card – 300
- Insurance – 100
- Food – 800
- Electricity – 100
- Mobile phone plan – 100
- Cable – 50
- Internet – 50
- Magazine subscription – $50
- Left over – $200.
- Netflix – 10
Budget plan for beginners step 2. Write down your total monthly income
The next step in creating a simple budget plan is to write down all of your monthly income. This can be easy for those who have a fixed salary each month. But if part-time work isn’t new to you, your monthly income could look like this:
- Profit of 9 to 5 – $2234.
- Freelance work – 300
- Blogging – $500
- Babysitter, $200.
Beginner’s Budget Plan Step 3. Determine your current financial situation
To do this, subtract your total expenses from your total monthly income. Remember that your ultimate goal is always to spend less than you earn so if you get a negative number, it means your expenses are higher than your income and you are living way beyond your means. You want a lifestyle where your expenses are less than your total monthly income. And to do this, you need to analyze your spending. Which brings me to my next step: …..
Beginner’s budget Step 4. Check your expenses
Even if you didn’t get a negative number in Step 3, there are still ways to revise your spending. This means scrutinizing all the items on your spending list and determining what is absolutely necessary. Some costs will be fixed and necessary. For example, the mortgage or the rent (depending on your case) will always remain fixed and necessary, unless you are willing to sleep on a park bench. Other expenses are considered luxuries, and it is up to you to decide which ones you can and cannot live without. Let’s look at magazine subscriptions in the above list of numbers. Are they necessary? And as far as TV shows go: Do you really have to pay for both Netflix and cable? How about choosing one of them? Then there will be costs that are necessary but can still be reduced. For example, you can cut your grocery shopping in half if you plan your meals and make an appropriate shopping list. You can also cut your electricity bill in half by making a few simple changes. Shh! Did you know you can save more money by planning your meals? Meal planning saves me thousands of dollars a year! Don’t know how to do it? Receive a copy of my free electronic meal planning guide. Every little bit counts and can lead to big savings! The extra funds can be used to increase minimum payments on credit cards and loans and to increase monthly savings.
Beginners budget Step 5. Choose a budgeting technique and stick to your budget
Creating a monthly budget is useless if you don’t stick to it. And it will be much easier to stick to your budget if you choose a budgeting technique that works for YOU. This means that you should use the system that suits you best. Try different methods, such as the cash envelope system or the 50 20 30 budget (you can choose different methods and ways of budgeting, since most overlap) and determine which one is easiest for you to follow. The Money Envelope System is very easy to use. This is how it works. After you have created a weekly partial plan, you should allocate the money to different expenses, for example. B. for food, child support, bills, etc. Then they put the allocated money into different envelopes. The trick is that you can’t use the money in the food envelope for anything other than food and such. This will help you stay on schedule and within budget. If you don’t want to use paper envelopes, you can always put your money in a nice wallet with different compartments ( , I love this ) OR you can use accordion organizers . Nice and easy, right? Want to know more about money envelopes? Check out this post about the BEST financial envelopes to avoid overspending (+ FREE financial envelope templates).
Starting budget level 6. Stay organised
This is such an important step in the budget process. Successful budgeting requires organization. This means keeping your budget plan, bills, receipts, etc. in one place. It can be a simple binder with a few staples or, if you’re as extreme as me (HA!), you can invest in a planner like this . Another way to stay organized is to use an Excel spreadsheet or an online financial planner like Personal Capital.
Starting budget level 7. Setting of financial targets
The final task of successful budgeting is to set specific financial goals. If you can define and visualize your goals, you are more likely to stick to your budget and be motivated to save. If you’re a visual person, make a vision board or hang a picture of your goal on your fridge. Write down your goals, set a deadline and make a plan to achieve them. It’s a good idea to set mini goals to make the journey seem easier and more achievable!
Now that you know how to create a simple budget plan for beginners,
Grab a pen and paper and start writing! Welcome to your path to financial freedom! This is the first step you need to take. Start now and you’ll be on your way to financial success. Soon you’ll be such a pro that YOU’ll be the one explaining to others how to make a budget plan! Are there any other important steps in the budget process that you would like to add? Do you have any other budgeting tips for beginners? Share it with us in the comments below. I’d love to hear from you! Don’t forget to share it and save it for later! While you’re here, I’d love it if you followed me on Pinterest! ***Before you leave, would youlike to manage your money better this year? Sign up for my free 5-day money management course! ***
Related articles Simple budget plan for beginners:
How to stay within your budget with a financial envelope system (+ free financial envelope templates) The best money envelopes to avoid overspending (+ free printables) Detailed instructions for preparing a 50-30-20 budget (+ concrete examples, worksheets and free printables) A comprehensive guide to zero-based budgeting
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How to make a hassle-free budget plan in 7 easy steps for beginners
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