The Beginner’s Guide to Budgeting

Imagine a world where you always have enough money. You’re confident that your paycheck will cover all your bills and you can easily pay them on time each month. You know how much you can afford to spend on food and other necessities, and you know how much money you have left to save or spend on drinks on the weekend.

In this world, nothing catches you off guard. You aren’t stressed or worried about making ends meet. You’re in control of your money. Your money is not in control of you.

Do you like this world?

Your new budget is the first step toward achieving this better way of life.

Budgeting: the key to mastering your money

Your budget will be your game plan for your money. It will align with your goals and values and help you stay focused. It will let you be proactive with your money and will make sure you use it intentionally.

This guide will help you learn how to make a plan for your money so that you get the most use out of it. When you finish your budget, you’ll have a plan to spend or save what you make; there won’t be any way for you to lose track of it or “accidentally” spend it. No excuses. Not anymore. You’ll be spending your money on purpose from here on out. Then you’ll be able to achieve your financial goals and have the peace of mind that you deserve.

Make a budget today

Before you get started, you’ll need the following information:

(Recommended) Financial Goals. It’s helpful to have goals when you get started so you know what you’re aiming for. If you don’t have them right now, that’s OK. You can still go through this process. But you WILL need goals.

Budgeting Method. You’ll need a system for writing and tracking your budget. You can also use a pencil and paper, but I recommend tools like Microsoft Excel and Google Sheets. They make budgeting faster and allows you to make edits quickly.

Income. Know 1) your total income and 2) the amount per paycheck. For instance, if you get paid twice a month, you’ll need both of those pay amounts.

Expenses. Know all of your monthly expenses, including minimum payments and remaining balances for all debts, and exact payment dates. You’ll also need to have any recurring expenses that are not bills, such as groceries, hair cuts, savings, dinner out, etc.

Sample Budget

This is the final post in my Free Budgeting Guide. To get caught up, click here.

You’ve put in the work to create your budget and adjust it to fit your goals. How does it feel?

Before we wrap up, we’ll review a sample budget and optimize it for three months. It’s important to take this step because it’ll help you see how you can use your budget to achieve your goals over time.

This budget is the same budget used in the previous steps of my Free Budgeting Guide, found below:

NOTE: This sample budget does not include interest, which will affect how quickly you pay off any outstanding debts.

Sample Budget:

This budget has $1,111.00 left to be allocated. $249.00 remains from the 1st paycheck, and $862.00 remains from the 15th paycheck.

You need to make sure this additional money is being used so you don’t accidentally spend it in the wrong places. You need to make a plan to spend this money.

Month One:

The goal is to get the “Paycheck Remaining” lines down to $0 so that all of your money is being used intentionally. Here’s an example of how to do that:

1st Paycheck: Increase savings to $175.00. Pay an extra $149.00 on the Chase Credit Card.

15th Paycheck: Save $214.00. Pay off the Chase ($101.00) and Capital One ($600) credit cards.

Month two:

Now that both credit cards have been paid off, you have an additional $53.00 in your budget. This leaves you with $1,164.00 remaining. You need to make a plan for this additional money. For example:

1st Paycheck: Continue saving $175.00. Increase Student Loan Payment 1 to $494.00.

15th Paycheck: Continue saving $214.00. Make an additional payment of $701.00 on Student Loan Payment 1.

Month three:

In your third month, you have $1,249.00 remaining in our budget. Why? Because, you’ve paid down your debts and reduced your total expenses. And by paying extra on Student Loan Payment 1, the total amount is just $260.00. That can be paid off this month, and you can find ways to use the rest of the money in your budget. See below:

1st Paycheck: Pay off Student Loan Payment 1 ($260.00). Continue saving $175.00. Make an additional payment of $234.00 for Student Loan Payment 2.

15th Paycheck: Continue saving $214.00. Increase Student Loan Payment 2 to $981.00.


In just three months, you were able to do some impressive things with the money left in your budget:

  • Pay off $850.00 worth of Credit Card Debt.
  • Pay off $3,575.00 worth of Student Loan Debt.
  • Save $1,167.00.
  • (REMINDER: This sample budget does not include interest, which will affect how quickly you pay off your outstanding debts.)

None of this would have been possible without first making a budget. It’s the only surefire way to be clear about your finances and to make a plan for how to use them. This may be an example, but think about what budgeting and focus can really do for you.

Thank you for taking the time to read and use my Free Budgeting Guide. I want to see you succeed, and I hope you find it useful. If you have any feedback or suggestions, please let me know. Additionally, if you want more personalized support, consider one-on-one coaching with me. You can also find a ton of helpful information on my blog.

Until next time! Be well,

Tim Booker

Adjusting Your Budget

This is the fourth post in my Free Budgeting Guide. To get caught up, click here.

Adjust your zero-based budget

Now is the time to make a plan for all of your money. If there is any money left in the Total Remaining part of your budget, you must allocate it all so that it reaches zero!

In the budget above, there’s $1,111.00 remaining. That comes out to $249.00 and $862.00 per paycheck. What can you do with this additional money?

Let’s say the goal is to save and pay off your debts. You could do the following:

1st Paycheck: Increase your savings from $75.00 to $175.00, and make an additional Chase Credit Card payment for the remaining $149.00.

15th Paycheck: Add $214.00 for savings. Put $101.00 toward the Chase Credit Card debt (instead of the minimum $23.00). Lastly, put $600.00 toward the Capital One Credit Card debt (instead of the minimum $30.00).

These changes used all the remaining money and took the budget to zero. This is EXACTLY what you want for your budget.

In the next post, we’ll look at the changes to this budget over three months so you get an idea of how a zero-based budget can help you achieve your goals.

If this was your budget, how would you handle the remaining money? Would you do anything differently? Why?

Monthly Income

This is the third post in my Free Budgeting Guide. To get caught up, click here.

Include your take-home pay

Add your total take-home pay as well as the amount you make per paycheck. Don’t worry if your pay varies each month; you can adjust these numbers each month as you get paid.

Calculate the Total Remaining Pay

Subtract your total payments from your total take-home pay. You know now how much money you have remaining each month after paying all of your expenses.

Find the amount remaining per pay period

Subtract each pay period’s take-home pay from its expenses. This amount should equal the Total Remaining Pay that you found above. You now know how much money you have left at the end of each pay period.

Double-check that all your amounts are accurate and that everything is calculate correctly. You want to make sure everything is right as you move on to the final step: Adjusting and maximizing your zero-based budget.

Payments and Expenses

This is the second post in my Free Budgeting Guide. To get caught up, click here.

List your fixed payments.

Things like rent, utilities, and subscriptions.

If you have debt (think credit cards or student loans), include only the minimum payment amount for each. You will adjust these amounts as you get further into your budget. Include the total balance of your debt in a separate space so you know how much it’ll cost to pay it off.

Add all your recurring payments to get the total amount.

Include your variable payments

Include recurring items that you pay for each month, but don’t have a bill: groceries, gas for your car, bus pass, savings, hair cuts, etc.

Don’t know how much you spend each month on these items? Give it your best guess. You can adjust these numbers later.

Add all your variable payments to get the total amount.

Add all your payments to get your total expenses for the month.

Add your fixed and variable payments to figure out how much you pay each month. This is the (minimum) amount of money you need for the month. If the amounts seem off, remember that you’re just starting your budget. You can adjust these numbers later.

When do you make payments?

List all of your expenses according to when they need to be paid. This will most likely be around the 1st of the month and the 15th of the month.

Calculate the total amount you pay per paycheck as well.

Tip: Try splitting your additional payments between the two pay periods. For instance, if you want to budget $200.00 for groceries, you can use $100.00 from your first paycheck and $100.00 from your second paycheck.

Make sure that the amounts per paycheck still equal your total payments calculated in the previous steps. If the math is off, take a moment to find and correct the error(s).