How to Budget

A budget is a plan for your money: every single dollar that’s coming in (income) and going out (expenses). When you learn how to budget—and make one every month—you give your money purpose. You. Take. Control.

How to Create
a Budget

List your income.

Write out every regular paycheck (and anything extra) coming in this month for you and your spouse, if married. Then add it all together to see how much you have to work with.

List your expenses.

Jot down all the giving, saving and spending happening this month. (Think groceries, utility bills, mortgage/rent . . . )

Subtract expenses from income.

This should equal zero (aka a zero-based budget). Put anything extra toward your current money goal or lower your planned spending—until you get to zero.

Track your expenses (all month long).

Stay on top of your spending by keeping track of every dollar that comes in or out of your budget.

Make a new budget (before the month begins).

If you overspent (or underspent!) on a budget line last month, make adjustments to next month. And don’t forget seasonal expenses.

The Best Way to Keep Up With Your Budget

You spend on the go—you should be able to budget that way too! Get our free budgeting app and stay on top of your finances. Every dollar. Everywhere.

Budget Tools and Resources

Budget Calculator

Enter your income and the calculator will show the national averages for most budget categories as a starting point. A few of these are recommendations (like giving). Most just reflect average spending (like debt). Don't have debt? Yay! Move that money to your current money goal.

Income

Expenses

Difference

$0.00

Total Expenses

$0.00
Read the free EveryDollar Complete Guide to Budgeting

Complete Guide to Budgeting

Want to learn more? No matter where you are in your budget journey—fresh face or old pro—this guide’s got what you need.

shop the Dave Ramsey envelope system collection

Envelope System

Use our envelope system to pay cash for those hard-to-wrangle budget lines (like groceries, restaurants and entertainment).

shop the Rachel Cruse wallet collection

Rachel Cruze Wallet

With six colors to choose from, this leather wallet is the most stylish way to organize your spending.

Still budgeting with paper? Download Dave Ramsey's budgeting forms from Financial Peace University to help you get started.

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Frequently Asked Budgeting Questions

A budget is a plan for your money—every single dollar that’s coming in (income) and going out (expenses).

Cover your Four Walls—food, utilities, shelter and transportation—before you budget for other essential expenses and fun.

This depends on what Baby Step you’re on (aka the proven path to saving money, ditching debt, and building wealth).

Once you are debt-free and have a fully funded emergency fund, start investing 15% of your gross household income in retirement accounts.

There are plenty of ways to budget: pencil and paper, spreadsheets, budgeting apps. Just make sure you budget every dollar, every month. If you want an easy, free way to create and keep up with your budget—check out our free EveryDollar app.

You’ve probably heard of the 50/30/20 rule or the 60% solution, but we use the zero-based budgeting method. This is when your income minus your expenses equals zero—aka you’re giving every dollar you make a job to do so none of it gets accidentally spent! It’s simple math that works no matter your household income.

It’s completely normal to have a few rocky budgets to start. It usually takes around three months to get comfortable with budgeting. You’ve got this.

Absolutely! When you’re listing your income, look over the last few months and pick the lowest amount you made as this month’s planned income budget line. You can adjust later in the month if you make more!

Budgeting gives you a true picture of your finances—and of your life! quote from EveryDollar user Genelle with her family of four.