# How to make a budget

> Start from what you take home, list your fixed bills, and set a number for each category from what you really spent. Then check your budget every week.

From Simple Balance: https://smpl.money/learn/make-a-budget/. Updated 2026-10-26.


A budget is a plan for what your money will do this month, made before the
month starts. You write down a few numbers, check them against what really
happens, and fix the ones that turn out wrong. It doesn't have to be strict,
and you don't fill it in once and forget it.

## Why it matters

With a budget, you decide once instead of at every checkout. Without one,
each purchase is a new choice made on the spot, often when you're tired or
hungry. A budget lets you make those choices ahead of time, when you're calm.

It also shows you the trade-offs. Money spent on one thing can't be spent on
something else. If you want $100 more for eating out, it has to come from
somewhere, and a budget lets you pick where.

You catch problems early, too. If you notice in the second week that groceries
are running high, you still have time to adjust. If you only find out when the
card bill comes, the month is already over.

And saving stops being whatever's left over. When saving is a line in your
budget, it happens. When it's whatever remains at the end of the month, there's
often nothing left.

## How to do it

These steps cover the same ground as the Consumer Financial Protection
Bureau's
[guide to making a budget](https://www.consumerfinance.gov/archive/blog/budgeting-how-to-create-a-budget-and-stick-with-it/):
what comes in, what goes out, and when your bills are due. Its
[budget worksheet](https://files.consumerfinance.gov/f/documents/cfpb_well-being_monthly-budget.pdf)
is a handy place to write it all down.

### 1. Start from what you take home

Use the amount that lands in your account after taxes and anything else your
employer takes out, not your salary. If your pay changes from month to month,
plan around a low month instead of an average one.
[How to budget with irregular income](https://smpl.money/learn/budget-with-irregular-income/)
covers that in more detail.

### 2. Write down the fixed bills

These are the bills that stay about the same every month: rent or mortgage,
utilities, insurance, your phone, the minimum payment on any debt, and the
subscriptions you're keeping.

### 3. Look at what everything else really costs

Groceries, eating out, gas, shopping and fun change from month to month. Don't
guess at them. Use the last two or three months of statements, which is what
[tracking your spending](https://smpl.money/learn/track-your-spending/) gives you. A budget
built on guesses tends to fall apart in the first week.

### 4. Set a number for each category

Start each one at about what you spend now. Then change a few on purpose: the
ones you want to bring down, and any goals you want to save for. It's easier
to stick with two or three changes than with fifteen.

### 5. Plan for the months that aren't typical

Car insurance twice a year, holidays, birthdays, new tires. These are easy to
leave out because they don't happen every month, and then they show up all at
once. [Utah State University Extension](https://extension.usu.edu/finance/faq/budget-for-non-monthly-expenses)
suggests adding up a year of these bills, dividing by 12, and setting that
much aside each month. That's what [sinking funds](https://smpl.money/learn/sinking-funds/) are
for.

### 6. Check in every week

Ten minutes a week is enough. Compare what you've spent so far with each
number. When a category runs over, take the difference from another category,
or accept it and move on. Change the numbers when you need to, but keep the
spending you record honest. A budget only works if it's checked against what
you really spent.

**Diagram: An example check-in. Eating out ran $30 over, so $30 of the fun budget moves to cover it. The two budgets still add up to $180.** Two budgets, before and after a weekly check-in, each drawn as a bar with a line where its budget ends. Green is what was spent within the budget, and red is what was spent over it. Before: eating out has a $100 budget and $130 spent, so it’s $30 over. Fun has an $80 budget and $20 spent, so it has $60 left, and $30 of what’s left is outlined. An arrow moves that $30 of the fun budget to eating out. After: eating out has a $130 budget and $130 spent, with $0 left, and its whole bar is green. Fun has a $50 budget and $20 spent, with $30 left. Together the two budgets are still $180.

### 7. Expect the first few months to be off

Your first budget is still partly a guess. By the third month, real spending
has corrected most of the numbers, and the budget starts to feel like it fits.

> **Pick a method later, if at all.** There are named ways to budget, such as
> [zero-based budgeting](https://smpl.money/learn/zero-based-budgeting/) and
> [envelopes](https://smpl.money/learn/envelope-budgeting/). Each one is a different answer to how
> strict to be. You don't need one to start. A number for each category is
> already a budget.

## How to do it in Simple Balance

In Simple Balance, a budget compares what you planned to spend in a category
with what you actually spent. A budget never changes your balances, so
deleting one changes nothing else.

### Start with real spending

Bring in a month or two of statements first, or type them in, so your budget
starts from real numbers. [How to track your spending](https://smpl.money/learn/track-your-spending/)
shows how. Then [**Overview**](https://smpl.money/docs/the-overview/) shows your spending by
category, so you can see what each one really costs.

![The Simple Balance overview for one month: a dollar total with balance, deposits, withdrawals and net cash flow across the top, then a checking account, a savings account and a credit card with their balances, beside spending by category as bars from rent down to subscriptions.](https://smpl.money/screenshots/dashboard-light.webp)

_The money in this picture is made up. It's the real product, filled with
example spending._

### Set a budget

Open [**Budgets**](https://smpl.money/docs/budgets/). Under **Set a budget**, choose a category,
type the monthly amount, pick the date it starts, and press **Set budget**.
That one budget covers every month from then on until you end it, so there's
nothing to set up again next month.

![The budgets screen: a form for setting one, with fields for the category, the amount and how it's decided, the currency, a start date and an optional end date, an optional savings goal and which budget gets funded first, and a checkbox for carrying what's left into next month. Below it, the list of standing budgets begins with $200 a month for dining out.](https://smpl.money/screenshots/budgets-light.webp)

_The money in this picture is made up. It's the real product, filled with
example spending._

### Read your budget

Each budget gets a row. **Budget** is your limit, **Spent** is what you've
spent, and **Remaining** is the difference. A refund lowers **Spent**, since
it gives back money you'd spent. A month that isn't over yet is marked **So
far**, because being under budget halfway through the month doesn't mean
you'll finish under.

**Diagram: An example month that isn’t over yet. Groceries is under its budget so far. Eating out has already gone $30 over, so its bar is full and red.** Two budget rows for October, halfway through the month, so the month is marked so far. Each row has a badge, then a bar that ends at a line for the budget. The whole bar is the budget, the filled part is what’s been spent, and the empty part is what remains. Groceries: a budget of $400, $260 spent, $140 remaining, marked So far, with its bar about two-thirds full and green. Eating out: a budget of $100, $130 spent, so remaining is minus $30, marked Over, and its bar is full and red.

Spending in categories you haven't budgeted shows up too, so you can see where
the rest of your money went. A category you budgeted but didn't spend anything
in still shows, at zero.

### Let one month be different

December's grocery bill isn't the same as November's. Press the calendar
button at the end of a budget's row to set an amount for just that month.
Clear it later to go back to the usual amount.

### A simple first month

Set budgets on your five biggest spending categories at about what they cost
now. On the two you most want to control, check **Carry what is left over into
the next month**, so money you don't spend stays put for later. For the next
big bill you know is coming, set a budget and fill in **Saving up for** and
**Needed by**. Then
come back once a week. The [Budgets](https://smpl.money/docs/budgets/) page in the
documentation has more detail.

## Sources

- Courtney-Rose Dantus, Consumer Financial Protection Bureau. [Budgeting: How to create a budget and stick with it](https://www.consumerfinance.gov/archive/blog/budgeting-how-to-create-a-budget-and-stick-with-it/). June 5, 2019.
- Consumer Financial Protection Bureau. [Monthly budget worksheet](https://files.consumerfinance.gov/f/documents/cfpb_well-being_monthly-budget.pdf).
- Melanie Dabb, Utah State University Extension. [How do I budget for non-monthly expenses?](https://extension.usu.edu/finance/faq/budget-for-non-monthly-expenses). October 13, 2020.