Budgeting doesn’t need to be complicated or time-consuming. In fact, you can have a clear, practical budget in place in less than five minutes. This guide will walk you through the process using straightforward steps — and you can use our Simple Budget Calculator to do the maths instantly.
Step 1 – Calculate Your Monthly Income
Your budget starts with knowing exactly how much you bring in every month. This includes:
- Your salary (after tax)
- Freelance income or side hustle earnings
- Benefits or other regular payments
💡 Tip: Always use your net income — the amount that lands in your bank account — rather than gross income.
Step 2 – List Your Fixed Monthly Expenses
Fixed expenses don’t change much each month. They usually include:
- Rent or mortgage payments
- Utility bills (electricity, water, gas)
- Loan repayments
- Insurance premiums
- Subscription services
Write these down so you have a clear total.
Step 3 – Estimate Your Variable Expenses
Variable costs are trickier because they fluctuate, but they’re equally important:
- Groceries
- Transport or fuel costs
- Entertainment and eating out
- Clothing and personal care
Look back at the past month’s bank statement for a realistic estimate.
Step 4 – Use the Simple Budget Calculator
Now it’s time to make the process fast and accurate:
- Go to our Simple Budget Calculator.
- Enter your income in the first box.
- Add your combined expenses in the second box.
- See your remaining balance instantly.
Step 5 – Allocate Your Remaining Balance
One easy method is the 50/30/20 rule:
- 50% on essentials (housing, utilities, groceries)
- 30% on non-essentials (entertainment, eating out)
- 20% on savings or paying off debt
This ensures your money is distributed logically without overcomplication.
Step 6 – Review and Adjust
Your first budget will rarely be perfect. Review it monthly and make adjustments if your income or expenses change.
Final Tip: You can genuinely create a working budget in five minutes. The key is keeping it simple, reviewing it regularly, and making use of tools like our calculator to cut out the heavy lifting.
FAQ:
- What’s the quickest way to create a budget? → List income, list expenses, subtract, and allocate the remainder.
- Do I need a spreadsheet? → Not if you use an online calculator.
- How often should I review my budget? → Once a month minimum.