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How To Budget Your Money For Beginners

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Do you work hard for your money only to find that at the end of the month, you have no idea where it all went? What that means is you don’t have control over your money. But how come you don’t control your money? I mean, you or your household busts your butt to earn money right? Well, if you don’t have a system in place, then it’s hard to keep track of how you spend your hard earned cash. I’ll show you how to budget your money that even beginners can do. 

What Is A Budget?

To put things simply, a budget is a plan you set on how to spend your money over a certain period of time.

For instance, you can create a monthly budget which tracks your income and all your planned expenses for the month.

Sure, you can create a weekly or yearly budget. I really recommend sticking with a monthly budget. It’s not too time consuming as a weekly one or too lax in case of the yearly budget.

What Is The Purpose of a Budget?

A budget helps you take control over your money.

Don’t be scared off by this concept. You’ll be surprised, budgeting can really help get your financial situation in shape.

Also, just because you budget doesn’t mean you have to cut all the things you want out. No, not at all!

You can still buy the things you want, go on trips, and still have fun while getting your finances right. It’s all in the planning.

Why Budgeting Matters

So, budgeting helps you take the reigns of your finances. But, why does that matter?

Are you struggling financially? Have debt? Can’t seem to save a penny? Live paycheck to paycheck? Can’t afford that nice vacation? Working so hard but don’t feel like you have anything to show for it? Over drafting on payments? Always getting hit with late charges on bills? The list goes on and on.

Having a budgeting plan will help you to finally see what you can do with your money. Think of a budget as a way to help you:

  • See Exactly Where Your Money is Going
  • Pay Down Debt
  • Save Money
  • Have Money to Invest For Your Retirement
  • Start Keeping Track of Bills
  • Stop Living Paycheck to Paycheck
  • Buy The Things You Want
  • Take That Nice Vacation
  • Saves You Stress From Finances

Budgeting matters because it gives you the reigns over your financial life. You get to control how to spend your hard earned money. Don’t you want to be in control?

Zero Based Budget

There’s a lot of budgeting systems out there. The one that I prefer to use is called a Zero Based Budgeting system.

Zero Based Budgeting is my favorite because it’s very simple to understand and implement.

Basically, all you do is take your monthly income amount and plan all your expenses for the month.

For example, let’s say your household brought in $4,000 for the month. You’ll take that amount and start planning to set spending amounts for categories like rent/mortgage, utilites, food, etc. See example below. You pretty much want to make sure that you’ve planned every single dollar towards a spending category.

Zero Based Budget MyFinancialHill

The whole idea behind this budgeting method is that you’ll do your best not to go over your set budget amounts. It’s super easy.

You can easily do this with a pen and paper.

Jot down your income and on one side go ahead and think of all your spending categories for your household.

Budget Items

When creating your budget, it’s important to list as many budgeting categories as you can.

List all your monthly expenses along with savings, and future expenses.

For example, start by listing all your necessary expenses for the month which may include:

  • Mortgage/rent
  • Electric, water, gas
  • Phone
  • Cable/internet
  • Car loan/insurance
  • Health insurance
  • Medical payments
  • Debt payments

Then you can add budget items for your savings fund which can be:

  • Emergency fund (3-6 month worth of expenses)
  • Cushion (1-2 month worth of expenses)
  • Retirement account

Next you can add items for future expenses which can include:

  • Kid’s braces
  • Furniture
  • Vacation
  • School tuition
  • Car maintenance

Every month, you can plan to set aside some money for each of budget line item within your own customized budget.

Keeping Tabs on Your Budget

Now that you’ve created your budget, it’s super important to keep track of all your budget items.

For instance, if you planned to set aside $500 a month for food and groceries, how will you know if you’ve spent more than $500 or less than $500?

This is why you’ll have to keep track of what you’ve spent for the month.

Then you can compare what you’ve actually spent to what you originally planned to spend for your budget items.

It’ll be a good idea to aim to stay within your budgeted amounts.

Evaluating Your Budget

At the end of the month, you’re going to see how you did overall.

Did you overspend in your budget or did you have a lot of money left over?

This will help you determine which budget line items to change and which ones you should leave alone.

For instance, did you plan to spend $600 on food but only spent $300? Then you can easily change your budget amount for food to $300 going forward.

If you’ve overspent on certain budget line items then you may have to make adjustments to accommodate the higher amount for the next month’s budget.

Overall, your budget is not set in stone and you can definitely customize it as you go along. But the whole point is to always make sure you’re trying to stay close to the budget.


Overall, budgeting can really change your life. It’ll help you see things you’re spending money on unnecessarily. It can also help you find tons of savings.

Once you set up your initial budget, it should be easy peazy from there. All you have to do is check in on your budget once or twice a month.

I highly recommend budgeting to help stay on track of your finances. It’s been so important in our debt payoff journey. We’ve paid off over $100,000 in 24 months and I accredit that to keeping a proper budget and saving money.

Do you need some more guidance when it comes to budgeting? I walk you through from A to Z and show you exactly how to create, set up, and use a budget monthly with one of my printables which is editable and does calculations for you. It’s part of My Financial Hill Budgeting Kit which also comes with tons of other resources that can help you finally take control of your money and get out of debt.

Grab the My Financial Hill Budgeting Kit

You can also get started by grabbing your free Debt Thermometer and join us in the free 5-Day Debt Free Bootcamp which will help you knock out your first $500 worth of debt within the first month.


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