Simple Budgeting: 3 Simple Steps Are All You Need!

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Money can seem super complicated. (And if you get into the weeds of it, like margin investing, then it can get somewhat complicated). But the basics of managing your money are really pretty simple. And in this article I’m going to share 3 simple budgeting steps that are all you need to begin to master your money and start to save!

3 Simple Budgeting Steps to Manage Your Money (Well!)

One of the great things about managing your money is that at the most basic level, there are really only two things you need to worry about when it comes to your finances: how much comes in and how much goes out (and what you do with that money that goes out).

We can complicate it in all sorts of ways, but really, it is that simple. And when it comes to budgeting, you can make a spending plan (which is what a budget is) in just 3 simple steps, to control what you do with that money that comes in.

So let’s talk about those 3 simple steps below.

manage your money with simple budgeting

Tip: Save the image above to Pinterest so that you can easily refer to this article with 3 steps for simple budgeting later!

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Dave Ramsey 7 Baby Steps PDFs (Baby Steps Printables)

3 Simple Budgeting Steps (That’s All You Really Need!)

So let’s talk about each of these three simple steps to help you budget well (so you can become a financial rock star!).

1. Figure Out Your Income

First, start by figuring out your income.

The easiest way to do that is to look at your electronic pay statements that you get from work.

Pro tip: I recommend that you and your husband combine all of your money and manage your finances together, so that means adding all of the income together for both of you.

So if you get paid twice a month and your husband gets paid twice a month, add all of those paychecks together, and that is your monthly income.

simple budgeting
The word payday circled in red

If you have an irregular income, where you get paid different amounts every paycheck because you work in sales, for example, then in your budget include as your income the smallest amount that you are likely to get paid. Then budget from that amount when calculating your monthly expenses.

2. Calculate Your Expenses

The easiest way to calculate your expenses is to look at your debit card or credit card statements.

Pro tip: If you are struggling to not overspend and you have a lot of debt, then don’t use your credit cards. You might even want to cut them up. Use debit cards, instead. (You can even find some debit cards with cool rewards programs, too!)

So while you are first starting to budget, use a debit card as much as possible, rather than cash. That will make tracking your expenses easier.

And to help make things easier as you get started, begin with your fixed expenses, those expenses that are the same month after month. Here are some common fixed expenses in a monthly budget.

Common Fixed Expenses

Common fixed expenses in many family’s households include the following:

  • Tithing or giving to your church
  • Charitable giving
  • Rent or mortgage
  • Renters insurance
  • Car payment
  • Automobile insurance
  • Life insurance
  • Health insurance
  • Dental insurance
  • Internet
  • Cell phones
  • Cable/satellite TV
  • Home phone
  • Gym or rec center membership
  • Monthly magazine or other subscriptions
  • Retirement savings

Then, after you have listed all of your fixed monthly expenses, calculate an amount for your irregular monthly expenses based on how much you have spent for at least the last month (but three months is better if you can figure that out, to give you a more accurate number).

Common Variable Expenses

Some of the most common variable expenses are these:

  • Groceries
  • Household items (cleaners, towels, and related items)
  • Eating out
  • Gasoline/fuel
  • Public transportation
  • Clothing
  • Utilities (electricity, natural gas, water, sewer, garbage)
  • Toiletries, makeup, and related items
  • Child care
  • Pet food and supplies
  • House maintenance
  • Home furnishings and appliances
  • Car maintenance
  • Education/tuition
  • Kids’ school or sports/music expenses
  • Entertainment
  • Electronics/toys
  • Recreation/sports and vacations
  • Hair care (stylist/barber)
  • Christmas
  • Gift giving (Christmas, birthdays, weddings, graduations, and so on)

Pro tip: Using a simple budget spreadsheet or a printable budget planner/budget binder is a great way to easily track your expenses and manage your money so that you can start to save money and work toward your financial goals.

3. Adjust the Numbers to Spend Less Than You Earn

Adjusting your spending so that you spend less than you bring home is the key to successful budgeting. 🙂 In order to have money to save and invest so that you can prosper financially and win with money, you have to hang on to some of your money. 🙂

In order to do that, I highly recommend work off a zero-based budget. That means that you account for every dollar that you earn by allocating it to something, whether that be your monthly expenses like food and a mortgage, debt repayment, savings, or investing for retirement.

To get to that point, you may need to find places where you can trim your expenses so that you aren’t spending more than you earn every month and aren’t going deeper into debt. Fortunately, there are tons of (even simple and painless) ways that you can cut your spending.

You can find great ideas for reducing your expenses (in virtually every budget category) here.

Need Help with Budgeting?

Want help with your budgeting? Do budgeting the easy way! With the Make It Easy Simple Budget Binder, you’ll find all the tools you need to track your expenses, reduce your spending, balance your budget, build your savings, and more! And it comes as a fillable PDF, so you can print it out or use it digitally!

Simple Budget Binder

Or, if you prefer to work with spreadsheets on your computer or digital device, then check out the Simple Budgeting Spreadsheets. You’ll find the same helpful tools and resources that are in the Simple Budget Binder, but you can use them in your favorite spreadsheet software (Excel, Google Sheets, and so on).

Simple Budgeting Spreadsheets

Summary of the Three Simple Budgeting Steps

When it comes right down to it, budgeting really consists of just 3 simple steps:

  1. How much you earn
  2. How much you spend
  3. Adjusting the numbers as needed until you spend less than you earn (so you have money to save, invest, and give) 🙂

Final Thoughts on Simple Budgeting

Budgeting really doesn’t have to be hard. 🙂 As Dave Ramsey says, it’s third grade math.

The problem is, we make it hard. But you can keep it simple, and the information and resources above can help.

Are there any simple budgeting tips that have helped you in the past? What is the best budgeting advice you have ever received? What about budgeting do you most need help with? Leave a comment below and let me know! I would love to hear your thoughts!

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