How to build a budget

Women and money |

Don't be scared of a budget, embrace it as the freedom to meet your goals.

How many of us really have a budget? Do you know where ALL of your dollars are going?

Each year you should take time to reflect on not only your spending habits, but also your goals. Ask yourself, “What are my financial priorities?” and “What are the most important things in my life?”

After answering these questions, take a look to see if your spending reflects your priorities and goals. If not, it’s time to make some changes.

That’s where a budget comes in. You should WANT to have a budget. But if that word gives you anxiety, change your perception and call it a cash flow plan. Whether you call it a budget or a cash flow plan, knowing the numbers will give you the freedom to make your goals a reality.

How to build a budget

Where is the money going?

One of the hardest parts about building a budget is figuring out all the different line items where our money could go. Instead of letting the details overwhelm you remember:

  1. The budget is never complete. It needs at least monthly review.
  2. Personalize your budget. It’s easier to follow a budget that is unique to you and your needs.
  3. Commonly missed budget items: charitable giving, clothing, dry cleaning, vehicle and other license renewals, taxes, vehicle replacement/repair, subscriptions, Christmas and birthday gifts and parties, veterinary checkups for pets, emergencies, and trips/vacations.

How do we track our spending?

There are many resources, websites, and apps that can get you started creating a basic budget – here is a link to a free download of an Excel cash flow plan spreadsheet. But I recommend you start with paper and pencil. Yes…PENCIL. You will be doing a lot of erasing in the first few months as you work through this document. If you write it out on paper instead of electronically, you’ll get a sense of ownership. You’ve created this cash flow masterpiece” by hand. Possibly even with some blood and sweat involved. Once you have a good idea what your inflows and outflows are, then you can transition back to electronic tracking.

Great budgeting resources: Every Dollar, Quicken, and Mint.

Give yourself some grace

No one is perfect. And that’s OK! Even if you go over budget one month, don’t sweat it. And don’t give up either! Get back on track as soon as possible.

It’s also important to expect the unexpected and set aside money for an emergency fund. Create a line item in your budget for “Miscellaneous, Uh-Oh,” and give yourself an allowance for those unexpected items. A monthly amount you can spend without the budget guilt. This will give you some grace and comfort that you have some wiggle room.

Get creative

After budgeting for a few months, and becoming a well-oiled cash flow machine, start evaluating your categories to see where you could save the most money and then the fun part, what will you do with those saved dollars.

Saving ideas:

  • High-efficiency light bulbs
  • Unplug devices when not being used
  • Use coupons when you shop
  • Evaluate and possibly change interest rates on your loans
  • Look into other TV and internet options
  • Drive less
  • Pay cash for big purchases
  • Staycations

What are some other ways you like to get creative saving money?

For where your treasure is, there your heart is also.
Matthew 6:21


Shari Beck
Financial Advisor

Don't do it alone

Need help creating a budget and getting your finances in order? Talk with a budget and debt for free through LSS Financial Counseling, a partner of Everence.


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