How to make a monthly budget you'll actually stick to

How to Make a Monthly Budget in 10 Simple Steps

Learn how to make a monthly budget (& stick to it) in 10 simple steps.

Are you finally ready to make a monthly budget and stick to it?

Maybe you’re tired of the cycle of spending more than you earn? 

I’ve been there.

In fact, it used to be a regular occurrence. 

When I wasn’t tracking my spending I wasted so much money on impulse buying.

Luckily, after a fair bit of trial and error, I realized I needed to take back control and get in charge of my finances.

I needed a budget.

The practice of making (and following) a budget can feel overwhelming. 

And, if I’m being honest, there are some tough sacrifices that sometimes need to be made.

But you can create a successful budget and you can make it work!

I’ve broken down everything I did to create my budget and now I’m sharing it with you.

*Disclaimer: I’m not a financial professional. The information contained in this post is based on personal opinion and should be regarded as entertainment only. Your financial decisions should not be based this advice.

10 Steps to Make a Monthly Budget (That You’ll Actually Stick To)

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1. Set a Specific Time to Budget

Stop saying you’ll get to it and actually do it!

Set a specific time to budget (preferably the same time each week) and get started.

Make sure you give yourself enough time to really explore your finances (especially when you’re starting out). 

And try hard not to rush through it.

I like to pick a time when I can focus on my budget for at least an hour. This way I know I have time to log into different accounts (banking, utilities, etc.) and compile all my expenses.

2. Set Up a Budgeting Framework

You need to decide where you’re going to keep your budget and how you’ll update it. And you’ll need to figure out how you want to track your expenses (weekly, bi-weekly, monthly…)

I personally use Google sheets (basically an Excel sheet). It’s easy to edit.

And my husband and I share the document with each other through the apps on our phone. 

This makes it easy to update expenses while we’re out spending the money.

And I personally feel a bit more secure not having to hand over my banking info to some of the budgeting apps out there.

You can decide how you want to do things, but for this post we’re assuming you’ll be using a spreadsheet and a monthly budget.

(Check out this post on different kinds of budgets to help you find one that works for you.

If you’re in, you can check out the free budget spreadsheet we’ve made for you here

(All you have to do is click the link and save a copy of the file. Then you’ll be on your way to making your own, personalized budget.)

Learn how to make a monthly budget with this FREE spreadsheet

You can customize this sheet for your specific expenses.

But having most of the work done for you means you can get your budget up and running a lot sooner.

3. Input Fixed Expenses into Your Spreadsheet

To make a budget you need to know what to budget.

Start gathering all your fixed expense information and input it into your spreadsheet.

A fixed expense is a set cost that doesn’t change from month to month. I.e, mortgage, insurance, car payment.

Fixed expenses are pretty straightforward to calculate so reference your online banking or service account statements to find your costs.

Go through and write down every fixed expense in the estimated expenses column of your monthly budget framework.

After writing the name of each expense, list the cost for that item. 

If you’re feeling stuck thinking of fixed expenses, check out the list below to see what you should be looking for:

Household Expenses 

  • Mortgage/Rent
  • Internet
  • Phone
  • Cable


  • Home insurance
  • Health insurance
  • Mortgage insurance
  • Life insurance
  • Disability insurance
  • Vehicle Insurance

Other Fixed Expenses 

  • Bank Fees
  • Car Payment

After writing out fixed expenses, your monthly budget might look like this:

Dealing with Annual Fixed Expenses

As you’re figuring out fixed expenses, make sure to think about costs that are billed to you annually. 

This could be anything from property tax to credit card renewal fees.

For things like property tax, there may be city-funded programs available to you that will break the bill out and charge you on a monthly basis.

But, if you prefer to pay annually, or there isn’t an option to be billed monthly, you’ll need to set up a savings account for your annual bills.

It’ll be much easier to deposit money to that account monthly than getting a huge bill each year. 

4. Write Down Variable Expenses

Next, figure out and record your variable expenses.

A variable expense is a monthly expense that fluctuates in cost.

Think groceries, utilities, entertainment.

To determine variable expenses, review your spending in this category over the past 2-3 months (thank you online banking!). 

This will help you figure out what you usually spend in the variable categories and allow you to get a reliable estimate of what you should budget for.

Once you have a good idea of your variable costs, record them in the estimated expenses column of your budgeting framework.

Note that if you mostly use cash and don’t keep receipts, you’ll have to start tracking spending for several weeks to get a good idea of your costs. 

If you’re having trouble dividing your variable expenses into categories, here are some suggestions:

Household Expenses 

  • Kitchen appliances & utensils
  • Household repairs
  • Utilities 

Vehicle Expenses 

  • Gas
  • Car Maintenance
  • Parking


  • Groceries
  • Eating Out

Kid’s Expenses 

  • Diapers
  • Clothing
  • Babysitter

Pet Expenses 

  • Food
  • Veterinary costs
  • Leashes, collars, toys, etc.

Personal Care Expenses 

  • Toiletries
  • Feminine hygiene products

Fun Spending 

  • Trips
  • Movies 
  • Home décor
  • Craft supplies

Other Spending 

  • Birthday gifts
  • Holiday/special occasion gifts
  • Charitable Donations

*Note: You want to make sure your variable expense numbers are as close to what you’re actually spending as possible. Later on, this will help you understand which areas you need to make changes in.

Figuring Out Utilities 

Some variable expenses, like utilities, require a bit more number magic. Because, it can be hard to predict how much your bill will be. 

 This is how I handle utilities (and you can apply the concept to other bills in a similar situation):

a)   Review my monthly costs for the past 12 months.

b)  Add up my costs for the entire year

d) Budget for 1/12 of that number for utilities per month.

*Note: For this to work you need to make sure you carry over any remaining totals to the next month. This will allow you to deal with the cycle of utilities costing more some months than others.  

Check out these ideas for how to save money on your winter utilities bill.

5. Make Savings and Debt Repayment Goals

Your budget doesn’t end once you figure out your basic “money in, money out” equation.

If you want to set yourself up for success, you should also consider planning for your debt repayment and your savings goals.

Some specific categories that you might want to plan for are:


  • Retirement savings
  • Travel savings
  • Emergency Savings
  • Funds for annual bills

Debt Repayment 

  • Paying off credit cards
  • Paying off ine of Credit

Even if you can’t afford to put a lot of money toward savings and debt each month, you should make a habit of at least contributing something.

Especially retirement savings. Because life goes fast!

If you’re wondering where to start, in terms of debt, research has shown that you should by pay off your smallest loan first (as long as interest rates on your loans aren’t super different). 

Paying off the littlest loan first has been proven to help motivate you to pay off your debt.

Check out our post on THE BEST way to pay off debt according to research.

As for savings, it’s a good idea to work toward having an emergency fund that equals 3-6 months of your living expenses. 

I know that sounds overwhelming, but don’t panic! 

You can work towards this over a number of years. You just need to make a specific weekly or monthly goal that you will be accountable for. 

6.  Write Down Your Income

After filling in all of your expenses, turn your focus to the earnings section.

List what you bring in each month from every income source. (Think full time jobs, side hustles, etc.)

It works best for me to write out after-tax totals so I know how much I actually have to spend. 

And, it’s easy to do by reviewing paystubs.

Tips for Irregular Income

If your income is unpredictable, you should include a section for reliable income (income you KNOW you’ll have) and a section for other income (income you can’t always rely on). 

See the examples below if you’re wondering what that would look like:

Figure out how much income you can count on each month and budget for that amount. 

If your income is very low some months, you may need to save during the months you earn more money and live on savings during the slow months. 

7. Calculate the Difference Between Your Spending and Earning

Now comes the moment of truth!

It’s time to figure out the difference between your spending and earning. 

First, add up everything in the estimated expenses column of your budget and write the number down.

Next, add up everything in your estimated income column of the budget and record the number. 

Now subtract your complete estimated expenses from your estimated income.

If the result is a positive number, that’s great; you have extra money!

(Though you might not want to think of it as extra. Instead you can allocate it toward a goal as we talk about in the next step.)

If the number comes back negative, you are spending more than you earn and need to make some changes. 

Below we’ll talk about how to revise your budget if you realize you’re spending more (or less) than you make.

8. Revise Your Budget

Your next step is to revise your budget (because I’m guessing you don’t magically spend the exact same amount that you earn). 

For most, revising will mean making some sacrifices.

Make Cuts to Your Budget

If you spend more than you earn, one solution is to make some cuts to your budget. 

To do this, first look at areas of the budget that you can control.

Some areas you may be able to reduce spending in are:

a) Groceries

You can cut your grocery bill down by meal planning, couponing, shopping sales, batch cooking, reducing meat intake, and eating more beans and rice.

Make sure you always have a plan for what you’ll eat the next day and have groceries available so you don’t impulse spend. 

b) Eating out

Stop eating out or reduce how often you eat out. 

Meal planning will make this easier as it’ll be almost as convenient as ordering in.

c) Fun Spending

Cut out or reduce your fun spending. Brainstorm cheap ways to have fun and stay home more often. 

If you invite friends over, ask them to bring potluck food or snacks. 

d) Gas

Ride your bike to work. Carpool. Stay close to home. 

e) Utilities

Shop around for a better deal on your utilities and switch providers. 

Call your current utility provider and negotiate a better deal for services. 

Conserve electricity by turning off lights. Keep your furnace off and wear a sweater. 

While you’re making your new spending goals, remember to be realistic.

Yeah, you can probably get your entertainment money down from $350/month to $100/month.

But it’s unrealistic for you to go from spending $300/month on groceries to $30/month.

Need to find more ways to save money? Check out this list of 60 creative ways to save cash (even if you’re on a low income)!

Find a Way to Make More Money

If you finish the previous exercise and you STILL find you don’t have enough money to cover expenses, you’ll need to find a way to make more money.

You might consider doing these:

a) Ask for a Raise:

Do some research, gather your courage, and ask your boss for a raise. If you do it professionally, the worst thing that’ll happen is you’ll be turned down. 

b) Get a Side Hustle:

Start a side hustle. You might try: freelance writing (I started out making $50/article freelance writing and I didn’t have experience!), virtual assisting, web design, housecleaning, photography, babysitting/childcare, or a  newspaper route. 

Try out drop shipping as a side hustle!

I’ve also been considering starting a drop shipping side hustle for quite some time. While I haven’t started yet, I did just finish a course on it that I found informative with some great tips!

If you have some basic understanding of drop shipping (like what it is and the basic mechanics) but you’re wondering how to go about doing it, check out this course

Note that it’s really geared toward creating a company where you make patterned, graphic or branded goods (like text on tees, patterns on legging, cute throw pillows, etc.)

It’s comprised of a bunch of videos showing you where to go and what to do to start your own drop shipping company. 

It doesn’t hold your hand the whole way (and honestly, the delivery of the info is a little rough in patches) but it is really informative! 

As someone with a basic understanding of drop shipping, it helped me feel like it is something I could do and I at least know where to get started.

Check out the course I’m talking about here if you’re interested!

c) Host an Exchange Student:

Many schools and universities work with exchange student programs that will pay you to host a student. Get in touch with local schools to learn about your options. 

You might also be interested in reading about these awesome work from home jobs.

9. Make Goals for Extra Money

While many people reading this post won’t struggle with extra money at first (especially if you needed step 9), it’s important to have a plan for leftover money when it happens.

A good budget won’t leave any money unassigned.

And whether you have $10 or $200 left over in your budget, you need to decide what to do with it. 

So look at your savings goals and debt repayment and allocate that money somewhere useful.

10.  Develop Your Stick-To-It Strategy

Figuring out how to stick to your budget is a vital step in being a successful budgeter. 

Check out this post on how to stick to your goals.

Plus, here are some tips that I like to use:

a) Choose a day and time when you will go over your budget each week

b) If you’re really bad at budgeting, choose a time every day to go over your budget

c) Make yourself accountable to a close friend or family member

d) Try different methods of tracking your budget until you find your best fit

e) Have a backup plan for when you go off budget (because this will happen)

Make a Monthly Budget by Getting Started Today

If you want to take control of your money situation, you need to build a monthly budget.

Believe me, I know it can feel overwhelming to start budgeting, but you can do it, even if you’ve failed before. 

Just work through these steps and stick to it.

Soon you’ll be saving money, getting out of debt, and feeling more at peace with your finances.

What do you have to lose?

Get started today!

Do you have any go to budget tips? We’d love to hear them in the comments below!

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Learn how to make a monthly budget (& stick to it) in 10 simple steps.

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