5 Simple Steps to Build Your First Budget

Starting a budget is often the first step toward financial freedom, but it doesn't have to be complicated. Here's a simple, practical approach that works.

Step 1: Know Your Income

Before you can allocate money, you need to know how much you're working with. Calculate your total monthly income after taxes. If your income varies, use an average of the last 3-6 months.

Step 2: List Your Fixed Expenses

These are the bills that stay roughly the same each month:

• Rent or mortgage
• Utilities
• Insurance
• Subscriptions
• Loan payments

Step 3: Track Your Variable Spending

For one month, track every purchase. You'll be surprised where your money actually goes. Most people find they're spending more on dining out and impulse purchases than they realized.

Step 4: Set Realistic Goals

Start with one or two financial goals:

• Build a $1,000 emergency fund
• Pay off a specific debt
• Save for a vacation

Step 5: Review and Adjust

Your budget isn't set in stone. Review it monthly and adjust as your life changes. The best budget is one you can actually stick to.

Remember: A budget isn't about restriction—it's about giving yourself permission to spend on what truly matters to you.