budget envelopes method

How to Create A Budget, the Easy Way

Making a budget is a lot easier than I thought when I first started.

Put simply, a budget is a tool in which you assign each earned dollar to a specific task.

For example, let’s say you get paid $500 every Friday. As soon as Friday comes, before you spend anything, give each dollar a job. $100 for car insurance, $200 for rent, $50 for groceries, and so on, until $500 is budgeted.

The purpose of a budget is to ensure you have enough to pay the bills. It also helps you organize how much you can afford to spend on trivial things like clothes and shoes to still afford the things you need.

The important thing to remember is that a budget is never “set”.

My budget changes every single day. If I spend all my food money (which I oftentimes do), I just move some money from other categories into the food one so it’s “zeroed out”, which means none of the categories are negative.

As I’ve mentioned in other posts, I prefer using YNAB (You Need a Budget). I like this app because it’s easy to use and I can access it from both my phone and laptop. It’s also super easy to use once you get a feel for how it works. There are many similar apps, and if you prefer you could use an Excel spreadsheet or pen and paper. Whatever you’re comfortable with.

YNAB example budget

If it works better for you to not have to write at all, use envelopes instead!

Take your paycheck and withdraw it in cash. Put all your cash in envelopes with categories written on them, and set aside some to spend. Once you spend all the money in your clothes envelope, for example, you’ll know you can’t afford anymore clothes this month. It’s that simple!

Budgeting can be easily overlooked by those who think their finances are in perfect shape. But spending the time to actually do it can help you learn your problem categories so you can adjust accordingly.

If you have any questions or would like me to clear something up, feel free to leave a comment or send me a message.

Thanks for reading and happy budgeting! 🙂

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