Budgeting 101 | How to Set Up a Budget for Beginners

This post may contain affiliate links, which means I’ll receive a small commission if you make a purchase. Originally posted on millennialtwist.com.

It’s fun finally being an adult and enjoying all the newfound freedom that comes with it – until the bills start coming in. In order to stay afloat, most adults begin the process of setting up a budget.

Not only will a budget help you plan for unexpected costs, but it can also help you plan for a weekend girls trip or a spa day without worrying about your bank balance. Check out these tips on how to create a budget like an adult and stick with it.

1. Write Down All of Your Expenses and Incomes

Start by breaking down all of your monthly spendings. You can go old school with pen and paper, make a spreadsheet on your computer, or download a budgeting app.

Make sure to include everything, including:

  • Rent
  • Utility Bills
  • Phone Bills
  • Monthly Subscriptions
  • Loan Payments
  • Gym memberships
  • Streaming subscriptions

Next, write down all the due dates. If you’re a visual person, buy a calendar or planner and notes them down on paper. This will help you determine what bills need to be paid when.

2. Organize Your Spending

After you make a list of your expenses, put them into categories such as bills, fun money, and groceries. Labeling each payment as specifically as you can ( “medical bills,” “student loans,” “car payments”) will help keep you on track with your calendar of due dates.

Organizing your spending into categories can help you decide which areas you need to cut back on in the future. If you’re looking to make a major change, aim for a zero-based budget. This involves planning every dollar you expect to make in a month.

3. Set Up Automatic Bill Payments

The Federal Reserve found that overall debt reached a record $1 trillion in March 2018. Debt can be an ugly revolving door because it often comes with late fees that make re-paying the balance even more difficult.

One trick to help avoid falling into this trap is to set up automatic payments. You’ll never have to worry about missing a payment – as long as you have money in your account.

4. Reduce Everyday Spending

Every millennial rolls their eyes when older generations joke about cutting down on the “avocado toast.” But there’s truth to every joke. By reducing your daily spending, you can see your account balance at the end of the month add up over time.

There are tons of ways that you can on costs. Instead of driving a fancy, high-end car, you could invest in a bike, carpooling with co-workers, or even consider switching to an all-Uber lifestyle. Reduce food spending by cooking quick and healthy meals at home, and bringing lunch to work. And when you’re shopping look for non-name brand items at the grocery store.

5. Treat Yo Self! (sometimes)

It’s nice to splurge on yourself every once in a while. But if you find yourself struggling regularly to pay the bills, then it’s time to practice a little self-discipline.

It’s important to understand why you’re spending in the first place. A study by Harris Interactive found 31 percent of women shop to elevate their mood. Other reasons for spending include:

  • Boredom
  • Sales temptations
  • Peer pressure

Take the steps to remove your temptation. Delete all of the shopping apps and change the settings on apps so you cannot buy something with one click. Try other mood boosters that don’t involve pulling out the credit card, like workout out or going outside. And when it comes to going out with friends, practice moderation or suggest a fun movie night at home instead.

6. Use Budgeting Apps

If you’re uncomfortable with keeping track of your budget manually, consider using a budgeting app. Some banks have budgeting tools built into their mobile apps that help categorize your spending for you. They can also send you notifications when you reach a limit in your account.

Otherwise, consider apps such as Mint or EasyDollar. Mint is able to automatically organize spending and it sends alerts when you start to overspend in a category. EasyDollar requires you to manually enter transactions, and it also shows when you go above your spending limit.

Adults Don’t Let Other Adults Go Broke

While the idea of reeling in your spending may seem like a drag at first, a few budgeting steps can go a long way in your bank account. Stay on top of all of your payments, work towards a goal, and keep your self-control strong.

Before you know it, you’ll be buying those once-in-a-lifetime trips and expensive love-yourself gifts in no time.


Lexi Carr is a freelance blogger with a passion for self-care and budgeting. From cooking what she loves to reading what she likes, she enjoys the simple things in life.


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Budgeting 101 | How to Set Up a Budget for Beginners

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