Published on December 17, 2020

How To Create a Budget (The Complete Beginners’ Guide)

How To Create a Budget (The Complete Beginners’ Guide)

Are your finances in bad shape because of poor budgeting? Panic no longer! In this article, you’ll learn how to create a budget that lets you stay ahead of your bills, save more money, and pay off debt.

Budgeting is the key to proper money management. Most people don’t create a budget because they think it’s tiresome and limits how they spend their money. In reality, budgeting is useful for tracking your income and expenses.

How would you like to hack your finances with a killer budget? It would put an end to most of your problems and improve your financial situation.

Forget the bad rap you might have heard about budgeting. You don’t need a strict budget to achieve your financial goals. It’s possible to be on a budget and still have a little fun from time to time. That’s my aim for you here!

This article will guide you on how to create a budget that works.

7 Simple Steps to Create a Budget That Works

It’s easy to get lost in your finances. Below are the steps on how to create a budget and learn better financial management for beginners.

1. Set Specific Goals

What do you want to achieve from budgeting? It helps if you have a detailed answer to this question before you begin creating your budget.

Most of the time, the goals of financial management revolve around saving, investing, or spending money on something within a particular period. If you’re specific enough on what you want, your budget will clear the way toward making it happen!

Let’s say you want to save money for a new car. It’s best to decide on a specified model and work toward meeting the price. It’s challenging to track your progress and be productive when you have random goals.


Don’t make the mistake of only budgeting to “free up some cash” without knowing how to put it into use. You might be successful at freeing it up, but there are high chances of the extra money going into fun activities and other unnecessary expenses. And that’s no progress at all!

Look at these tips on How to Set Financial Goals and Actually Meet Them.

2. Gather All Your Financial Records

Your financial records are essential for creating a successful budget. You want to be sure that everything you put down aligns with these documents.

They include the following:

  • Bank statements
  • Credit card statements
  • Utility bills
  • Insurance policies
  • Mortgage contracts
  • Retirement and investment statements
  • Receipts

The more documents you can find, the easier it becomes to structure your budget. You should always store your important financial records somewhere safe for future reference. This way there’ll be no more guesswork when making significant financial decisions.

3. Find Your Net Income

In this step, you need to find an exact figure for your monthly earnings. Your income reports come in handy in this case. They show you all the money coming in and hence, how to create a budget that works.

Keep in mind that it’s the after-tax income and not the total salary that we’re talking about here. This income is what remains after federal, state, and withholding taxes have been applied.

If you’re employed and usually receive a regular paycheck, it’s easy to find your net income. You can add any automatic deductions back to the after-tax amount and put down the associated expenses in your budget. These deductions include money payable on 401(k) plans, insurances, and savings.

As for your other income streams, such as part-time jobs, you only have to deduct any applicable taxes and business expenses. It’s best to use the lowest monthly earnings you’ve ever gotten within the past year. This approach increases the accuracy of your net income and therefore, your budget.


4. List Your Monthly Expenses

You need a comprehensive list of everything you pay for each month. Most monthly expenses occur in the following categories:

  • Housing
  • Food
  • Health
  • Transportation
  • Utilities
  • Entertainment

Review your bank statements, credit card bills, recent utility bills, and receipts from the past few months to get a clear picture. If you have any credit card debt, student loan, or personal loan, add them to the list. Be sure that it’s the monthly payment on the debt balance and not the whole balance.

Savings are also an essential part of a budget. A good saver doesn’t save money as an afterthought. Setting aside a particular amount that goes into savings is crucial for achieving financial success.

You can include debts and savings in the categories they fall, such as housing or transportation. But don’t double-count anything!

5. Determine Your Fixed and Variable Expenses

First, you should determine your fixed expenses for each month. These are the expenses that remain constant over a long period.

It’s improbable that you’ll find a chance to cut back on your fixed expenses, but having them on your budget shows you where your money goes month after month.

They include the following:

  • Mortgage
  • Rent payments
  • Utility bills
  • Loan Payments
  • Car, house, and health insurances

Next, find out your variable expenses. They’re the ones that change from one period to another. Depending on your consumption, you can find something to slash a bit and put the extra money toward savings, investments, or debt payment.

Bear in mind that the term “variable” comes from the act of fluctuating and doesn’t mean that the expense is unnecessary.


Variable expenses include the following:

  • Groceries
  • Car maintenance
  • Household maintenance

If you find it challenging to come up with an amount for any variable expense, calculate the cost for the past year and divide it by 12. It’s also good to prepare yourself for the next few months. This approach saves you from financial disaster in case a variable expense becomes higher than expected.

6. Calculate Your Monthly Income and Expenses

Once you have the totals of your income and expenses, work out the difference between them. Lower expenses and higher earnings mean that you’re good to go. You can save the extra money or put it into meaningful investments.

On the other hand, higher expenses and lower earnings indicate that you’re overspending and must act fast. If you find yourself in this case, you can either start generating more income or reduce your spending.

Most of the time, it’s much easier to cut down your expenses than to find a high-paying side gig or start a successful business overnight.

7. Change Your Spending Habits

If you’re spending more than what you earn, you have to adjust your expenses and allow room for achieving your financial goals. This is key to mastering creating a budget. The same applies if you feel like your expenditure doesn’t suit your path to financial freedom.

Most of us spend money on non-essential things from time to time. It could be dining out, buying new outfits, or going on vacations. What if you could replace all that with cooking at home, only buying clothes for special occasions, and going on staycations?

Figure out the expenses you can eliminate and those which you can skip for some time. It’s best to start slowly by getting rid of one unnecessary expense at a time. Within no time, you’ll be able to live without them and allocate your money to other useful things.

The 50-30-20 Budget Rule

Now that you know the basics of how to create a budget, the next step is to know how to reach your financial goals. Below is a guide on how to use the 50-30-20 budget rule to reach your financial goals faster.


1. Spend 50% of Your After-Tax Income on Your Needs

The 50-30-20 budget rule states that you should limit your needs to 50% of your after-tax income.[1] These include all your monthly expenses—fixed, variable, and non-essential expenses.

You should determine all the expenses that you deem “needs.” In most cases, they’re the ones you necessitate. Forgoing them has significant impacts on your life. For instance, housing, utilities, and groceries fall under the category of needs.

2. Spend 30% of Your After-Tax Income on Your Wants

Your wants are the things you desire, but you can live without them. Don’t start thinking about trips, high-end restaurants, and beautiful clothes yet. You may want to fix the “little things” that bug you before you go into luxury.

How about repainting your house, doing cosmetic repairs to your car, or upgrading your home Internet? The list goes on. You only have to picture your situation and find out what your meaningful wants are.

3. Spend the Remaining 20% on Savings and Debt Payments

The least percentage of your after-tax income that should go toward savings and paying debts is 20%. You shouldn’t only allocate the amount that remains at the end of your budget to these purposes. If any extra cash comes up after you’ve applied the 50-30-20 budget rule, put it into savings and debt payment.

Bottom Line

Budgeting is a financial habit that comes with many benefits. One of the best benefits of budgeting is that you get a chance to take control of your finances.

With proper money management, you can be debt-free, pay bills on time, and save more money.

Now that you know how to create a budget, you better start making one!

More Tips on How to Create a Budget

Featured photo credit: Kelly Sikkema via


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Mike Stuzzi

Mike Stuzzi is an Internet entrepreneur and personal finance blogger at The Money Galileo.

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Last Updated on April 19, 2021

40 Healthy And Really Delicious Meals You Can Make Under $5

40 Healthy And Really Delicious Meals You Can Make Under $5

Ever had those moments where you really wanted to eat something delicious and healthy but didn’t have the financials means to do so? Whether you’re a student or parent, this compilation of 40 great, healthy, and inexpensive recipes will make every night special and help you get fit! No more meals where you have to force the food down! It’s time to make that budget your best friend and turn it into great recipes. Enjoy!

1. Fish Tacos in Crunchy Shells ($3.56 per serving)

Is there a better way to end the day than a Fish Taco dinner filled with protein and nutrients and is easy on the wallet? This recipe calls for a boys’ or girls’ night in front of a good movie or game.


    2. Mini-Meatball Noodle Soup ($3.43 per serving)

    We’ve heard of the delicious spaghetti and meatballs recipes, but imagine having that same meatball goodness in a soup? It’s like Christmas in a bowl. Healthy, warm, and only $3.43 per serving.


      3. Spaghetti and (Vegan) Meatballs ($2.13 per serving)

      Now it’s time to look at the traditional spaghetti and meatballs recipe, but with a little twist: vegan meatballs. This way, you can enjoy the Italian tradition without adding on the extra calories. I’m sold!


        4. Kabocha Squash and Lentils ($3.12 per serving)

        Absolutely delicious way to end the day with a Kabocha Squash and lentils dinner. The beauty of this recipe is that you can actually make many other things from the mixture, from dips to full-on meals. All under $5 per serving.


          5. Baked Coconut Lentils ($0.91 per serving)

          Coconuts are always a good idea, but it doesn’t have to be eaten only for dessert or breakfast. With this great recipe, you can now eat a lunch or dinner filled proteins and a coconut twist. Yum!


            6. Easy Marinated Roasted Chicken ($3.40 per serving)

            We love chicken and at less than $5 per serving, we are in heaven with this recipe. Add some vegetables and rice on the side and you’ve got yourself a full meal!


              7. Organic Greens and Goat Cheese Gratin ($2.36 per serving)

              This is absolutely divine. You get in your healthy greens and your fat macros with this great recipe. Takes only a few minutes to make and it’s easy on the wallet. Bon Appetite!



                8. Beef Pot Roast ($3.22 per serving)

                One word: perfect. This meal will warm your insides and fill you up with the high protein content.


                  9. Fajita-Style Quesadillas ($0.43 per serving)

                  If you want to eat Mexican tonight but want to stay in your budget, this Quesadilla recipe is your best friend. It’s tasty and filled with healthy ingredients for less than a dollar per serving.


                    10. Fish Tostadas with Chili Lime Cream ($2.82 per serving)

                    Another great lunch idea for the busy days ahead. Prep this in the morning or the night before and you’ve got yourself a healthy and cheap lunch meal!


                      11. Beef and Black Bean Chili ($1.36 per serving)

                      Might not look like much, but this amazing chili is actually extremely healthy for you. The protein from the beef and the carbs from the black beans will fill you up in no time, and keep you full for a long period of time. Delicious and warm, just right for the winter!


                        12. Crispy Fish and Peppers ($2.18 per serving)

                        Amazing recipe for anyone looking to change up their meals while keeping their macros in check and not going overboard on spending. Satisfies your crunch tooth (see what I did there?) and gives you all the protein you need to stay full and lean.


                          13. Vegetarian Gumbo ($1.50 per serving)

                          You have the perfect macro mix here with the carbs, fats, and proteins. At less than $5 per serving, you’ve got yourself a meal that will last for the whole week!


                            14. Mexican White Bean Soup ($0.99 per serving)

                            With the cold weather creeping in, it’s not a surprise that soups are coming back in style. This great Mexican White Bean Soup dish will keep you warm for winter without making a hole in your pocket.


                              15. Black Beans with Mango & Cilantro ($0.38 per serving)

                              Mangoes make every dish a little bit sweeter, which is why we absolutely love this recipe. A normal rice and bean dish might be a little meh, but add the sugary taste of mangoes and you’ve got yourself a party!



                                16. Bean Burritos ($0.71 per serving)

                                If you’re having people over tonight and don’t want to spend too much time or money on food, this dish is a great option! You can even cut up the burritos into pieces and make finger foods while everyone’s watching the game or gossiping.


                                  17. Five-Spice Beef Kabobs ($2.43 per serving)

                                  The spices in this recipes add a delicious twist to the beef kabobs, which is definitely worth trying!


                                    18. Cornmeal Crusted Pork ($1.92 per serving)

                                    If you like the fried crunch but want to opt for a healthier alternative, cornmeal is your man. This healthy recipe will satisfy all your fried desires without making you pop open your pant’s button.


                                      19. Chicken, Tomato & Cucumber Dinner Salad ($2.57 per serving)

                                      Easy to do, extremely healthy, and super delicious. A must-try!


                                        20. Lentil Soup with Beef and Red Pepper ($1.90 per serving)

                                        I can’t believe how cheap this meal is, especially for all the nutrients it contains. You can make a big pot on Sunday night and divide it into small portions to last you a whole week.


                                          21. Smoky Mushroom Stroganoff ($1.90 per serving)

                                          Craving pasta but not sure what to top it off with? How about smoky mushrooms with a twist?


                                            22. White Bean Tuna Salad ($1.36 per serving)

                                            You can add this White Bean Tuna Salad in your sandwich or just eat it as-is for a quick lunch on a busy day.


                                              23. Sausage Eggwiches ($0.80 per serving)

                                              Who says you have to eat fast food to get an eggwich? This delicious recipe will give you an amazingly healthy eggwich for less than a dollar per portion. Can you say Breakfast?



                                                24. Baja-Cali Black Bean Salad ($1.17 per serving)

                                                Great snack to add to a movie-night with friends. You don’t have to use chemically-processed salsas anymore, you can now use this homemade salad for your chip dips.


                                                  25. Gnocchi, Sweet Corn & Arugula in Cream Sauce ($2.24 per serving)

                                                  Italians always knew how to make carbs look good! This delicious Gnocchi recipe will give your lunch a whole new meaning. Easy to make and only $2.24 per serving.


                                                    26. Vegetable Lasagna ($1.73 per serving)

                                                    If you were looking for a healthy lasagna, you’ve just found it. At under $5 per serving, you can fill yourself up right away without putting on the extra calories.


                                                      27. Fajita-Ranch Chicken Wraps ($2.05 per serving)

                                                      Don’t know what to make for lunch this week? How about delicious chicken wraps with a healthy ranch? This recipe will make all your lunches, even the quick ones, healthy and colorful.


                                                        28. Quinoa with Pan Roasted Brussels Sprouts ($1.24 per serving)

                                                        A dish that has quinoa and brussel sprouts can’t be unhealthy, it just can’t, which is why this dish is one to keep in the books. Easy to make, healthy, and will keep you full for a long period of time.


                                                          29. Butternut Squash Chili ($1.04 per serving)

                                                          You don’t need meat to make chili now that you have this recipe! It’s 100% healthy, filling, and smells absolutely delicious.


                                                            30. Fast Shrimp Bisque ($2.03 per serving)

                                                            Seafood doesn’t have to be expensive if you know how to do it right, and this fast shrimp bisque is a great recipe to try if you’re in the mood for some seafood!


                                                              31. Chicken-Noodle Casserole ($0.98 per serving)

                                                              Looks divine doesn’t it? This super easy to make dish will satisfy all your taste buds without burning a hole in your wallet or adding a few extra numbers on the scale.



                                                                32. Burrito Cups ($1.18 per serving)

                                                                Entertaining someone tonight and don’t know what to make as appetizers? These burrito cups are a great alternative to chips or other greasy finger foods. All you need to enjoy it is a spoon and a cup.


                                                                  33. Lemon-Dill Shrimp & Pasta ($2.45 per serving)

                                                                  Another impressive shrimp recipe under $5 per serving. The lemon-dill twist adds a great taste to the dish.


                                                                    34. Potato Frittata ($0.87 per serving)

                                                                    If you want to eat potatoes for breakfast but still want it to be healthy, this is the recipe for you. At under a dollar per serving, this potato frittata will make you see potatoes in a whole new light.


                                                                      35. Grilled Pork and Pineapple ($2.67 per serving)

                                                                      Meat and fruits? Oh, yes. The juiciness of the pork mixed with the liquid sugar in the pineapple will make you wish you knew about it sooner.


                                                                        36. Greek Honey-Lemon Pork Chops ($2.15 per serving)

                                                                        Another splendid recipe mixing sweet and salty for a healthy meal. Easy to make and absolutely mouthwatering.


                                                                          37. Jamaican Pork Stir-Fry ($2 per serving)

                                                                          You can add this healthy stir-fry to any dish as a side or amply enjoy it as-is for lunch or dinner. You can even make a wrap sandwich out of it if you’re in a rush to eat.


                                                                            38. Herbed Salmon ($2.49 per serving)

                                                                            Salmon contains a healthy dose of fats that will boost your metabolism, lower inflammation, and make you happier. At under $5 per serving, need I say more?


                                                                              39. Five-Spice Pork Kabobs ($1.96 per serving)

                                                                              Exquisite recipe under $5 per serving that will most definitely awe everyone at your dinner party.


                                                                                40. Stuffed Sweet Potatoes with Mango-Black Bean Salsa ($1.24 per serving)

                                                                                You don’t have to eat sweet potatoes alone anymore with this flavorful recipe.


                                                                                  Featured photo credit: Featured Photo Credit: 5 Dollar Dinners via

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