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Whether you're barely making ends meet or you're coasting along comfortably, sticking to a budget will help give you more control over your money. That's because you'll have a better idea of what you're spending, so you'll know if there are any areas where you need to cut back. Creating a budget isn't always fun, but financial freedom definitely is, so it's worth the time to take a good look at your spending habits and create a realistic plan for your money!

[Edit]Steps

[Edit]Budgeting Help

Sample List of Expenses

Sample Low Income Budget

Sample High Income Budget

[Edit]Budgeting Your Money

Create a starting budget by subtracting your expenses from your income. To get started making your budget, add up all of the money you get in a month. Then, calculate your average expenses for a month, and anything else you spend money on. Finally, subtract your expenses from your income to see if you're spending more than you make.^[1]
- Your income might include any money you earn from a job, contributions from your family or others, and any other payments or financial assistance you receive.
- Your expenses will include bills like your rent or mortgage, car payment, and insurance, as well as things like groceries, clothing, books, and entertainment. Some of these expenses will be the same each month, like your rent, while you'll need to calculate the monthly average of others, like groceries.
- Try this worksheet to help you determine your starting budget: https://www.consumer.gov/content/make-budget-worksheet
Set spending limits based on your starting budget. Once you see a basic breakdown of where your money is going, evaluate the way you're spending your money. If there are any areas where you're currently overspending, try gradually cutting them back to make a little more room in your budget.^[2]
- Try breaking your expenses into categories to see what you're spending. For instance, you might list things like your rent, phone bill, and utility bill in a category titled "Bills." Expenses like groceries and dining out might go into a category titled "Food," and things like clothing and school supplies for your children might go into "Kids."
- Unless you need to drastically cut down on your spending, it's usually best to start by setting small, easily attainable savings goals. For instance, if you spend a lot of money on streaming services, you might start by canceling the one you use the least, rather than eliminating them all right away.
Track your spending to ensure you stay within your spending limits. It's not enough to set limits for yourself; you also have to monitor what you're actually spending to make sure you don't go over those limits. The exact way you do this will depend on what works best for you—you might find it easier to write down each purchase as you make it, or you might prefer going over your bank and credit card statements at the end of the month to see how you did.^[3]
- One benefit of writing down your purchases as you go is that it's easier to remember exactly what you bought. However, some people find this tedious.
Leave some room in your budget for extras. It's hard to stick to a budget if it makes you feel like you can't enjoy your favorite things in life. If you're able to, try to leave at least a little extra money every month for things you really enjoy, like having a night out with friends or buying new craft supplies.^[4]
- Being on a budget can actually help you free up extra money for the things you love, because you'll be less likely to impulsively spend on things you don't really want.
- Remember to be realistic—if you can't figure out how to make room for something in your budget, you might have to let it go.
Put some money from each paycheck into savings. It can seem hard to save when you're on a budget, but having a little money put aside for emergencies or unforeseen expenses can be a life-saver when you need it. When you're planning out your budget, make it a priority to put even a little money into savings every time you get paid. Even if it doesn't seem like much, it will start to add up quickly!^[5]
- Start by setting a reasonable goal, like saving $10 or $20 a week for a few months. Once that begins to feel comfortable, challenge yourself to increase the amount, if you're able.
- Eventually, you should try to have about 3-6 months' worth of expenses saved in case you find yourself unable to work.
Try the envelope method to help organize your cash. If you mostly use cash to pay for things, it can be hard sometimes to keep up with where it goes. One way to help keep your cash spending on track is to divide your money into different envelopes. Label each envelope with what the money's for, and only spend what you have set aside.^[6]
- For instance, you might have envelopes labelled "Groceries," "Clothing," "Medical Bills," and "Dining Out." If you know you're going to be meeting friends for lunch, you'd grab the "Dining Out" envelope.
- Don't borrow from other envelopes if you overspend, or else you could run short in another category at the end of the month.
Write down your bills in a calendar to help pay them on time. Get a calendar, planner, or app that will help you keep track of each bill you owe each month, as well as their due dates. That way, you won't accidentally forget to pay a bill, which can cost you extra money in late fees and other penalties.^[7]
- Making late payments can have a sneaky impact on your long-term budget, as well. They can lower your credit score, meaning you'll get higher interest rates on things like a car loan or mortgage—and a higher interest rate means higher monthly payments.

[Edit]Staying Disciplined

Learn to say no and avoid temptations. These days, there are endless opportunities to spend money. If you want to successfully stick to a budget, it will take self-discipline and willpower. It won't always be easy, but try to keep your goals in mind when you're tempted to buy something you don't really need. Also, get in the habit of occasionally turning down invitations from friends, especially if you tend to spend a lot of money while you're out.^[8]
- It might be necessary to avoid places where you're often tempted to spend more than your budget, especially at first. If you tend to shop online, try unsubscribing from promotional emails so you won't feel like you're missing out.
- When you do go out, bring cash, and only what you can afford to spend.
- Try repeating a mantra when you're tempted to spend. For instance, if you're saving for a trip, your mantra might be, "Beach vacation!"
Transfer money to your savings automatically. Each week, have a certain amount transferred from your paycheck directly into a separate savings account. It's a lot easier to save money if you don't actually see it first.^[9]
- This goes for things like retirement contributions and a healthcare savings account (HSA) if you have them, as well.
- If you get paid in cash, get in the habit of taking out your savings as soon as you get paid—preferably before you spend anything else.
Set financial challenges for yourself. If you want to manage your money a little better, try creating a personal challenge, like bringing your lunch to work for 30 days or not buying any new clothes for 3 months. Sometimes you just need an extra push to change your habits.^[10]
- Try telling a friend about your challenge to help hold yourself accountable!
Avoid using credit cards unless you can pay them off. When you buy something on a credit card, you generally aren't charged interest if you pay off the whole balance each month. However, if you only pay the minimum amount due, you'll continue being charged interest every month until the balance is gone.^[11]
- Credit cards make it easy to overspend, since they seem like free money. If you have trouble controlling your spending, it's probably best to avoid them altogether.
Keep trying, even if you mess up. While it's important to be financially responsible, it's also important not to beat yourself up if you spend a little too much money here and there. Even if you've made big money mistakes in the past, try to keep your attention focused on the future, and keep putting one foot in front of the other until you hit your goals.^[12]
- Remember, it takes time to learn new habits, so don't get too discouraged if you have trouble hitting your budgeting goals. Sometimes, this can even be a sign that you need to change your budget, rather than your spending, so keep evaluating and adjusting your finances every month.

[Edit]Finding Ways to Save

Comparison shop before you make a purchase. The internet makes it incredibly easy to see prices for the same item across different stores, so you can always get the best deal. You can comparison shop for everything from groceries and school supplies to your cell phone plan or car loan, so take advantage of the resources you have available to ensure you don't overspend.^[13]
- Try searching for items in sites like Google Shopping, Shopzilla, and Bizrate to compare prices from different retailers.
Cook at home for most of your meals. Even if you don't think you eat out very often, you may be spending a lot more money than you realize on things like fast food and snacks from the convenience store. To help avoid that, plan out your meals ahead of time, and pick up groceries about once a week with everything you'll need for each meal.^[14]
- Make your grocery shopping more efficient by couponing and planning to use the same ingredients in multiple meals.
- If you find a good deal on meat or produce, buy extra and freeze some to use later.
- Dress up cheap ingredients to make them more exciting! For instance, you can make a tasty meal out of ramen noodles by adding a fried egg and thinly-sliced green onions.
Shop secondhand and clearance sales whenever possible. You can often save a lot of money if you're willing to buy something secondhand rather than new. Try checking thrift stores and consignment shops in your area to see if they have anything that you've been meaning to buy. You can also find good deals by shopping for off-season clothes in the clearance section at your favorite store.^[15]
- Look for "free shipping with no minimum" deals when you're shopping online, or use membership perks that come with free shipping.
- Remember to check resale and auction sites online! However, use caution before you meet anyone in person to buy something from them—it's best to bring someone along with you, and leave if you get a bad feeling.
Cancel your cable if you use a lot of streaming sites. If you spend most of your time watching shows on Netflix, Prime Video, or Hulu, you may find that you'd be perfectly fine without your cable provider. This is called "cutting the cord," and it's an increasingly popular way to save a little extra money on your monthly budget.^[16]
- On the other hand, you might find that it's more cost-effective to bundle services like your internet, cable, and cell phone. In that case, you might cancel any streaming services you don't use often.