Budgeting Basics: How to Create a Simple Budget That Works

If you’ve never had a budget or you’ve tried before and couldn’t make it stick, you’re not alone. I used to feel completely overwhelmed by where to even start. Every “money plan” I found online felt too complicated or unrealistic for my real life. Over time, I learned that keeping it simple is what actually works.

This guide is the no-frills version of budgeting. It’s for anyone who just wants to know where their money goes and how to make it stretch a little further. I’m going to walk you through the steps that helped me get my money on track and finally feel in control again.

#1 - Know What's Coming In

The first thing you need to do is figure out exactly how much money is coming in. Grab a notebook or open your notes app and write down every source of income you have. That could be your main job, side work, or anything extra that shows up each month.

Use the amount you actually see hit your account after taxes. If your income changes from month to month, go with the lowest amount you can count on. That way, anything extra feels like a win and your basics are always covered.

This number might change over time, and that’s okay. Adjust it as you go and keep it simple. Once you know what’s coming in, everything else gets a lot clearer.

#2 - List Your Bills and Fixed Expenses

Next, write down everything that leaves your account each month. Start with the basics like rent or mortgage, utilities, phone, and insurance. Then add things like debt payments, car payments, or subscriptions you pay for every month.

Go through your recent bank statements so you don’t miss anything. This part isn’t about judging your spending, it’s just about seeing the full picture. You’re building awareness, not making cuts.

When you finish, you’ll know exactly how much it takes to keep your life running each month. That number becomes the base for your budget.

“You don’t have to see the whole staircase, just take the first step.” – Martin Luther King, Jr.

#3 - Track What Changes Each Month

After you’ve listed your bills, look at what’s left from your income. That leftover amount is what you’ll use to plan for things like groceries, gas, eating out, and other flexible spending.

For example, if you bring in about $6,000 a month and your fixed bills total around $2,500, you’ve got $3,500 left to work with. That’s what you’ll split between your variable expenses, savings, and debt payments.

Start by listing the categories that come up most often, like food, transportation, and fun money. Give each one a spending limit that makes sense for your life. Think of it as saying, “I have up to this amount for groceries,” instead of “I must spend exactly this much.”

If you come in under your limit, that’s great — you’ll have a little extra cushion for savings or next month’s goals. You’ll get to the debt and savings part in the next step, but for now, just focus on organizing what’s left after your bills.

#4 - Add Your Debt and Savings to This Simple Budget

Now that you’ve set your spending limits, it’s time to look at what’s left and decide how much goes toward debt and savings. This step is what helps you move forward instead of feeling stuck in the same cycle. Start small and be honest with yourself. If you only have a little extra, that’s okay. Saving twenty dollars a week or sending an extra fifty toward a credit card still counts. The goal is to start building consistency, not perfection.

If you have a few different debts, focus on one at a time — maybe the smallest balance or the one that feels the most stressful. For savings, aim to build a small cushion first. Even a few hundred dollars can make life feel a lot calmer when something unexpected comes up.

This part of your budget might change as you go, but getting something on paper now gives your money direction. It’s not about doing everything at once; it’s about making progress you can actually keep up with.

#5 - The Hard Part Is Done, Now You Grow

You just built the foundation of your budget and that’s the hardest part. The rest comes with time and small adjustments. Your budget doesn’t have to be perfect; it just has to begin. As life unfolds and your goals shift, you’ll tweak it, learn from it, and find your rhythm.

The more you check in with your numbers, the more confident you’ll feel about where your money is going and what it can do for you. Awareness builds trust, both in your budget and in yourself.

Now that you have your foundation, you can build on it and start shaping your money around the life you actually want to live.

Keep Your Glow-Up Going

You’ve built the start of your simple budget, and now it’s your turn to put it into action. Try these steps for yourself and notice how much lighter it feels to finally have a plan that works. If you found this helpful, share your thoughts or questions in the comments. I’d love to hear how your budget glow-up is going.