How To Make A Basic Budget

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Are you overwhelmed by budgeting? Here's a simple way to make a basic budget.

Don’t you just love the word “budget?” If you’re like 90% of the population, you are currently shaking your head no.

How To Make A Basic Budget

Yes, budgets can be daunting, boring, and even confusing, but they don’t have to be! In this post, we’ll share a few simple tips to show how to make a basic budget, and not feel overwhelmed.

List Your Needs First

One thing that makes us so leery to start a budget is that we don’t identify what are wants and what are needs. Needs need to be taken care of first, but if you don’t know what they are, you tend to place your finances in the wrong part of your budget.

Needs include 4 main things: food, shelter, transportation, and utilities. That’s it, y’all. No, cable isn’t a need. No, your Netflix and Hulu membership is not a need.

You need to eat, you need a place to live, you need some kind of transportation to get to your place of work, and you need to keep the lights and heat on in your home.

{Related: How To Make A Grocery Budget}

Use Percentages

Working with percentages is the best and most efficient way to budget. The income you bring home is 100%. Each part of your budget will take up a special percentage of that 100%. If you add up the percentages within each line and they equal more than 100%, you know right away there is a problem.

You’re spending money that you don’t have. Now, you can fix it! Once you realize this problem, you can see where you have to save money, deplete certain lines in your budget, or possibly adding a side hustle to your life to turn that 100% into a bigger number.

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Work From Take-Home Pay

This may seem self-explanatory, but it’s worth mentioning. You can only budget from the money you actually bring home, which is your net amount. If you have money taken out for retirement, insurance or some other line in your budget, you don’t have to add that to your bottom line.

But, be warned: although you don’t have to budget for it, be sure to set a quarterly reminder to check on the amounts taken out for those items. If that amount fluctuates in any way, it’s going to affect your budget.

Adjust As Necessary

We mentioned this above, but if you see that your percentages aren’t adding up, or you must add 10% more to your grocery line in your budget (hello kid having a growth spurt!), adjust the rest of your budget. Adding 10% somewhere in the budget means you need to take away 10% somewhere else.

Make Sure You Reach Zero

The kind of budget we have mentioned throughout this post is called a zero based budget. You start with 100% and budget out every single part of that 100%, until you reach 0. If you are finding that you aren’t reaching 0 after you create your budget, then you must re-evaluate where you’re money is going.

A tip: if you have money leftover, that’s not actually a good thing. That means you are leaving money out there, when it could be assigned to something important, like groceries or increasing your savings. You must reach zero each and every time.

Want to see how to make a basic budget in action, and create one for yourself? Watch this video:


About Amiyrah

My name is Amiyrah and I'm an an African American fashion & lifestyle blogger based in Ohio.

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  1. 1.17.17
    Laurie said:

    I track every dollar of spending in a spreadsheet, and analyze once in a while to see if I have started any bad habits and find new ways to save money. Great tips for budgeting, thanks for sharing!

  2. 1.29.17

    Tracking your expenses can be a bit tedious but it is very important when we want to take things on the right perspective.