Best Budgeting Tips for Beginners: A Step-by-Step Guide

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Have you decided to finally take control of your life financially?

You’ve come to the right place!

I’m going to be sharing the best budgeting tips for beginners. 

There are tons of saving challenges and budget types out there, but we’re going back to the basics. 

I’ll be walking you through this step-by-step budgeting guide for beginners so you can finally save money for a house or car, or whatever your financial goals may be!

Don’t forget to pin this for later!

Why do you Need a Budget?

First, why do you even need to create a budget?

It’s so easy to lose track of your expenses. Even if it’s small fees or buying a few things from the dollar section, it can add up fast. 

Don’t you hate it when you start sweating when you go to open your banking app. I used to get so nervous every time I checked. You don’t have to play the guessing game if you make a budget.

I know money doesn’t buy happiness, but there are probably some things you want to buy. Budgeting will help you get closer to buying that car, house, or vacation way faster.

If you create a budget, that means you’re not spending money you don’t have. You’ll spend way less time stressing about paying off debt and be happier because of it.

How to Start a Budget

Now that you know why you need to budget, let’s get into how to start a budget and some of the best budgeting tips for beginners. 

Figure out How Much Money you Bring In

The first step to create a budget is to figure out how much money you bring home. How much money do you make after taxes, 401(k), and health insurance is taken out. (This might take out a bigger chunk than you realized. 

Don’t forget to include other sources of income, like side hustles, your partner’s income, or passive income.

Write Down all of Your Bill Amounts

The next step is writing down all of your bill amounts. It’s easier to start with your monthly bill amounts, such as car payments, rent/mortgage, subscription services, loans, etc.

Don’t forget to account for bills that might occur every 6 months or annually, like property taxes or car insurance. You don’t have to include these in every monthly budget, but keep them in mind during the month they fall in.

Write Down all Other Expenses

The third step is writing down your variable expenses. These may change from month to month. 

Here is a list of your possible variable expenses

• Food (groceries and restaurants)
• Gas
• Utilities
• Clothing
• House or car maintenance
• Entertainment (movies, bowling, bars, etc.)
• Miscellaneous

What are your Budgeting Goals?

Now that you know how much money you’re bringing in and spending, you need to set some goals. 

What do you want to get out of this? Set some short-term and long-term goals. A short-term goal could be saving an extra $50 this month, and a long-term goal could be something like saving for retirement.

Now out of these goals, what’s going to be your priority?

One of my best money saving tips is to pay off debt first because you’ll save money in the long run by paying less interest!

Find the Best Method of Budgeting for You

Of course it’s perfectly fine to do a basic budget worksheet or app to keep track of how much you spend and want to save, but there are also some specific budgeting methods. I won’t go into detail in this post, but here are some examples.

• Cash envelope
• Low income
• 50/30/20
• Half payment

Check back because I plan to go into detail about these budgeting methods!

Figure out Where you can Make Cuts

Once you have your budget set up for one or two months, you can start to see what some of your bad money habits may be. This is one of the best budgeting tips for beginners.

If your goal is to save money, you can see where you could make some cuts to save more money. Maybe you’ve realized that you’re spending too much money on entertainment or subscription services. 

Write down your goal for spending in that category and (try your best) not to go over!

Best Budgeting Tips for Beginners Summed Up

That’s it! Now you’re ready to start saving up for that house you’ve always wanted.

Be sure to follow along for more tips on saving money and making money from home!