Creating a simple personal budget always comes down to one thing: keeping your total monthly expenses below your monthly take-home pay. <\/p>\n\n\n\n
But there are about as many ways to do that as there are people on the planet.<\/p>\n\n\n\n
You can keep things at a high level or you can break your spending down into personal budget categories. You can track your budget in a spreadsheet or use a personal budget app to stay on top of your money.<\/p>\n\n\n\n
Fortunately, there are a few basic approaches to personal budgeting that make it much easier to get started, and they all begin with the same first steps.<\/p>\n\n\n\n
This guide will walk you through 4 great approaches to personal budgeting, all of which are designed to keep your budget flexible\u2014so you can handle anything life throws at you while keeping your personal monthly budget on track.<\/p>\n\n\n\n
The first number you need for your personal monthly budget is your monthly take-home pay.<\/p>\n\n\n\n
If you\u2019re lucky enough to get paid once a month for working one job with a steady paycheck, this step is simple. Whatever you bring home each month after taxes and other paycheck deductions is your monthly take-home pay.<\/p>\n\n\n\n
For everyone else, your monthly income might move around a bit: <\/p>\n\n\n\n
No matter what your personal situation is, even if your income changes from month to month, you can still work out a good starting point for your monthly take-home pay:<\/p>\n\n\n\n
Your monthly \u201chave-to\u201d bills are things like:<\/p>\n\n\n\n
In other words, \u201chave-to\u201d bills include anything you can\u2019t decide to skip. (Netflix doesn\u2019t count. No matter how much you love Netflix, you could pause it for a month if you had to.)<\/p>\n\n\n\n
These are also known as \u201cnon-discretionary expenses\u201d or \u201cfixed expenses.\u201d<\/p>\n\n\n\n
As you add up these expenses, be sure to think about things you might only pay for once every three months, every six months, or even every year.<\/p>\n\n\n\n
For example, if you save money by paying your entire car insurance premium every 6 months, remember to include one-sixth of that amount in your monthly expenses.<\/p>\n\n\n\n
If you add everything up and your expenses are higher than your income, don\u2019t give up! A simple budget is one of the best tools you can use to turn your personal finances around.<\/p>\n\n\n\n
After you create your budget, this guide will walk you through some helpful tips for making ends meet and even getting ahead.<\/p>\n\n\n\n
Finally, you\u2019ll want to add up your \u201cnice-to-have\u201d subscriptions and other expenses. Also known as discretionary, variable, or flexible expenses, these are the things you pay for every month but don\u2019t technically have to have.<\/p>\n\n\n\n
They include things like:<\/p>\n\n\n\n
It\u2019s important to add these up because they\u2019re charged automatically every month. If you don\u2019t pause them, you\u2019ll need to account for them in your budget.<\/p>\n\n\n\n
Your next step is to decide what financial goal or goals you want to work toward.<\/p>\n\n\n\n
Of course, your first goal is to make sure your personal monthly budget actually works\u2014that your income is higher than your expenses. Again, if you\u2019re not there yet, don\u2019t give up. That\u2019s the best reason to make a budget!<\/p>\n\n\n\n
Once your budget is working, try to find some extra money every month that you can put toward your financial plans. That might mean:<\/p>\n\n\n\n
If you\u2019re not sure what to do first, a good rule of thumb is to work in this order:<\/p>\n\n\n\n
A goals-first personal budget is just what it sounds like: put some money aside for your goals first, every time you get paid. Then set aside enough to cover your fixed bills, and spend the rest on whatever you want.<\/p>\n\n\n\n
If you\u2019re just getting started and your income is higher than your monthly expenses, this is a great way to ease into a personal monthly budget. It helps you make progress toward your goals at any level that makes sense for you.<\/p>\n\n\n\n
Experts recommend trying to set aside 10 to 20% of your income for your goals, but paying even $50 extra on a credit card every month can make a big difference toward reducing that debt.<\/p>\n\n\n\n
If you\u2019re wondering how to keep track of what\u2019s left, you\u2019ll find that section at the end of this guide.<\/p>\n\n\n\n
The 50-30-20 budget is more like a set of recommended guidelines than a hard-and-fast budget. If you\u2019re more interested in good spending \u201ctargets\u201d than an actual budget, this personal monthly budget might be perfect for you.<\/p>\n\n\n\n
If you\u2019re already close to these numbers, you can probably make this budget work for you with just a few tweaks to your spending here and there. <\/p>\n\n\n\n
If you\u2019re not, that\u2019s okay. The best budget is the one that\u2019s going to work for your situation, so don\u2019t get caught up in goals that don\u2019t fit. Instead, start where you are today and create a personal monthly budget you can reasonably stick to.<\/p>\n\n\n\n
There are two ways to approach the track-every-category budget: the old-school way and the new-school way. <\/p>\n\n\n\n
The old-school way was born of a time when people kept track of money on paper in personal budget spreadsheets\u2014and when stores were mostly specialty shops. You went to the butcher, or the grocer, or the hardware store. <\/p>\n\n\n\n
Back then, people often split their budgets into lots of small personal budget categories. The receipt from the grocer went for groceries, and so on.<\/p>\n\n\n\n
You can still use a personal budget spreadsheet to track your spending, but it doesn\u2019t make much sense in today\u2019s world of Amazon and Walmart to break all your spending into super-granular personal budget categories. People go to one store for everything from cat litter to clothing.<\/p>\n\n\n\n
Instead, the new-school way to create a track-every-category budget is to keep those categories at a higher level:<\/p>\n\n\n\n
It\u2019s not an exhaustive list, but you get the idea. A track-every-category budget is a tougher template to create because you\u2019ll probably want to modify it to suit your own needs. Still, this one is at least a good starting point.<\/p>\n\n\n\n
What\u2019s a personal spending plan? It\u2019s a kind of hybrid budget\u2014something between a goals-first budget and a new-school, track-every-category budget that combines the best of both. <\/p>\n\n\n\n
A spending plan works in broad spending \u201cbuckets,\u201d with the flexibility to let you spend your money however you need to while still keeping track of where that money is going.<\/p>\n\n\n\n
Here\u2019s how it works. Start with your income. Set aside the money you need for your monthly fixed spending and keep track of it in broad personal budget categories<\/a>, like Rent and Food.\u00a0<\/p>\n\n\n\n With what\u2019s left, set aside money every month for your goals, like paying down debt or building your savings. Create a separate bucket for each of those goals so you can keep track of your progress. That helps you stay motivated!<\/p>\n\n\n\n Finally, spend the rest however you want to. Just keep track of it in the same spending buckets so you can see what you\u2019re spending it on, in case you want to adjust anything.<\/p>\n\n\n\n This last system is the hardest to keep track of without personal budget software or a personal budget app, but it\u2019s also arguably the most powerful.<\/p>\n\n\n\n Why? Because the savings goals help you stay motivated, while the spending categories provide you with the information you need to make ends meet and find places to save.<\/p>\n\n\n\n If your fixed expenses are higher than your income, remember there are two ways to fix that:<\/p>\n\n\n\n The simple act of putting a personal monthly budget together can be highly motivating when it comes to both.<\/p>\n\n\n\n If you want to earn more money to help make ends meet, don\u2019t overlook the job you already have. Making more of an effort at work and proving you\u2019re ready for a raise or promotion is a great way to increase your earning potential.<\/p>\n\n\n\n Are you in a dead-end job? Spruce up that resume and start sending it out. Sure, it can be scary to put yourself out there, but it\u2019s worth the effort not to get stuck in a job without a future. <\/p>\n\n\n\n If you\u2019re not doing something you love, try something else. It\u2019s easier to succeed when you\u2019re doing something you enjoy and care about. Can\u2019t afford to leave your day job and start again? That\u2019s okay, most people can\u2019t. Instead, find a way to do it as a side hustle or part-time gig while you\u2019re building your credentials, experience, and income. <\/p>\n\n\n\n Don\u2019t give up on your dreams! Just find a way to pursue them that makes sense financially.<\/p>\n\n\n\n Here\u2019s the good news: when it comes to finding places to save, you\u2019ve already done the hard part\u2014figuring out all your current expenses. <\/p>\n\n\n\n The first thing to do is look through that list and find any subscriptions you aren\u2019t using or don\u2019t really care about. Canceling those can save a surprising amount of money. (Fun fact: most people significantly underestimate what they spend on subscriptions<\/a> every month.)<\/p>\n\n\n\n Once you\u2019ve done that, look through the rest of your list and think about the things that are relatively easy to change. For example:<\/p>\n\n\n\n Your own best ways to save will be unique to your personal budget. If the things that are relatively easy to change aren\u2019t enough (or don\u2019t seem that easy), look at larger lifestyle choices:<\/p>\n\n\n\n Remember, if you\u2019re in a situation that makes it hard to cut back, go back to option #1 and try to build your income instead. If you work back and forth between the two, you can usually find a way to make ends meet and work toward your long-term goals.<\/p>\n\n\n\n Here\u2019s the thing about personal budgets\u2014they don\u2019t work unless you stick with them. To do that, you need to track your spending consistently, every month.<\/p>\n\n\n\n Your banking app will tell you how much you\u2019re spending, but it won\u2019t usually give you a way to track your personal budget categories. It only keeps track of the total you have in your account, so it isn\u2019t very helpful as a budgeting tool.<\/p>\n\n\n\n It\u2019s possible to track your spending and savings in a personal budget spreadsheet, using an app like Google sheets, but remember that you\u2019ll have to enter all your spending by hand. Still, if you have the time to do that, people have been using spreadsheets to track their spending for generations. <\/p>\n\n\n\n If you\u2019re going to use a manual personal budget spreadsheet, try to set aside time for it every day so the job doesn\u2019t get too overwhelming.<\/p>\n\n\n\n On the other hand, for just a few dollars a month, you can invest in personal budget software or a personal budget app, saving yourself a lot of time. Software and apps designed for personal budgeting can connect to your accounts so you don\u2019t have to enter all your spending yourself. Instead, the app enters your spending automatically and tracks it all for you.<\/p>\n\n\n\n Simplifi by Quicken, for example, is a personal budget app<\/a> that uses the spending plan system, making it easy to get the best of both worlds\u2014flexible spending and motivational savings goals<\/a> that you can track in categories. You can even add your own tags, letting you organize and track your spending however you want to.<\/p>\n\n\n\n No matter how you decide to track your new personal budget, just be sure to choose a method you can stick with over the long run. Because if there\u2019s one rule when it comes to your personal budget, it\u2019s this: the best budget for you is the one you\u2019ll actually use. Need a simple personal budget? Stay on top of your spending with these 4 personal budget templates and walkthroughs that make it easy to get started.<\/p>\n","protected":false},"author":59,"featured_media":3112,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"none","_seopress_titles_title":"How to Create a Simple Personal Budget That Works | Simplifi by Quicken","_seopress_titles_desc":"Need a simple personal budget? Stay on top of your spending with these 4 personal budget templates and walkthroughs that make it easy to get started.","_seopress_robots_index":"","inline_featured_image":false,"footnotes":""},"categories":[108,61],"tags":[],"class_list":["post-3186","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budgeting-savings","category-how-to"],"acf":[],"jetpack_featured_media_url":"https:\/\/www.quicken.com\/blog\/wp-content\/uploads\/2021\/04\/Simplifi-Budget-Template.jpg","_links":{"self":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/3186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/comments?post=3186"}],"version-history":[{"count":3,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/3186\/revisions"}],"predecessor-version":[{"id":3836,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/3186\/revisions\/3836"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media\/3112"}],"wp:attachment":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media?parent=3186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/categories?post=3186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/tags?post=3186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Here\u2019s a spending plan personal budget template:<\/strong><\/h4>\n\n\n\n
How to Make Ends Meet for Your Personal Monthly Budget<\/h2>\n\n\n\n
Option 1. Find ways to make more money.<\/h3>\n\n\n\n
Option 2. Find ways to spend less money.<\/h3>\n\n\n\n
How to Track Your Personal Budget<\/h2>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"