Skip Navigation
Site Logo
Make a budget

The easiest way to manage your money is to create a budget that clearly lays out what you have to spend, where that money is going, and to allow you some cushion. Eventually, you can start to review your spending to see where you can put your money to better use, which will help you achieve long-term goals.

How to Make a Budget

Keep Things Simple by Determining Your Income

Your first step in setting up your personal budget is to figure out exactly how much you have coming in. Experts with The Balance recommend you start by collecting your paycheck stubs and recording all your sources of income. If your income is fairly static and you're paid weekly, take the amount of your take-home pay, multiply it by 52 and divide it by 12 – this will then paint a picture of how much money you have coming in each month.

Divide Your Expenses into Fixed and Variable

Your housing costs likely have little flexibility. You have bills that must be paid that do not vary month per month such as car payments, insurance payments, and other regular loan payments such as student loans. These would all be considered ‘Fixed Expenses.’ For those who already have a monthly savings habit, keep treating these as a fixed expense. If possible, try to get your home utility fees on a budget plan as well.

Managing Variable Expenses

Variable expenses include both needs and wants. You need groceries, but you want lobster. If you find that you have more time in the month than money to spend, you may need to take a close look at your variable expenses to see where you can reduce your spending. When considering variable expenses, don't lose sight of your personal preferences - take time to consider what matters and what is most important to you.

Food: Review your grocery receipts for any money spent on unnecessary items. Many grocery stores offer their own brands on items and they usually are at a decreased cost. It’s a great way to still get what you need and what while saving a little money at the same time.

Clothing: We all need something to wear depending upon our jobs, hobbies, and overall lifestyle. Keep an eye on sales as well as second-hand stores to save a few bucks.

Travel: Many of us need a car to get to and from our jobs and your car payment is likely a fixed expense until you can pay it off. Keep in mind that the extra gas for a weekend road trip will need to be tracked under variable expenses.

Use a Flexible Formula

According to NerdWallet, you should use the 50/30/20 rule. This structure allows for fixed expenses, variable expenses, savings and extra debt repayment funds.

50%: Half of your take-home pay should be used to keep you housed, fed and insured. In this category, make sure to track any child care needs because that is a necessity for most in order to go to work. You should track basic utilities, including phone and data, as well as transportation.

30%: Approximately 1/3 of your take-home pay should cover your wants. This category is very personal. If you're paying for a gym membership and hiring a dog walker, it may be time to reconsider. For those who prefer to buy organic produce but hit the candy machine every day at 3:00 p.m., your wants might be at war with one another. If you can reduce your wants, you can move more money into the 20% category.

20%: NerdWallet recommends you set aside 1/5 of your take-home pay for debt repayment and savings. Depending on your goals, you may be able to reduce the percentage you're dedicating to your basic expenses in the 50% category and use them for a big ‘want’ or to put more towards debt or into savings.

Track Regularly on the Tool of Your Choice

If you go to the trouble to set up a budget in a notebook or on a spreadsheet, make budget tracking a weekly appointment. It should take very little time to record what you made or spent on a weekly basis. Experts with Money Crashers suggest using a budget tool that will allow you to see your monetary choices. A budget tool can help you grow your savings or reduce your debt.

Build in Some Flexibility

It's important to note that setting up a budget doesn't mean being a miser. No matter how tight money is, include something for entertainment or a treat. Going too long without giving yourself a little monetary break can lead to a budget-busting binge.

Work With a Professional

Contact the financial experts at Truliant Federal Credit Union to help you set up savings and checking accounts that you can easily and automatically fund. Truliant can help you simplify your budget plan and make it work.


How much am I spending?

The calculator on this page is solely for informational purposes and provides reasonably accurate estimates; the calculations are not intended to be relied upon as actual yield computations.