Creating a simple personal budget always comes down to one thing: keeping your total monthly expenses below your monthly take-home pay. 

But there are about as many ways to do that as there are people on the planet.

You can keep things at a high level or you can break your spending down into personal budget categories. You can track your budget in a spreadsheet or use a personal budget app to stay on top of your money.

Fortunately, there are a few basic approaches to personal budgeting that make it much easier to get started, and they all begin with the same first steps.

This guide will walk you through 4 great approaches to personal budgeting, all of which are designed to keep your budget flexible—so you can handle anything life throws at you while keeping your personal monthly budget on track.

How to Get Started with a Simple Personal Budget

Step 1. Add up your monthly take-home pay

The first number you need for your personal monthly budget is your monthly take-home pay.

If you’re lucky enough to get paid once a month for working one job with a steady paycheck, this step is simple. Whatever you bring home each month after taxes and other paycheck deductions is your monthly take-home pay.

For everyone else, your monthly income might move around a bit: 

  • Does part of your pay come from tips? 
  • Do you work shifts that change weekly or monthly? 
  • Do you have a side gig that brings in some extra cash?
  • Do you get paid every week or every 2 weeks?

No matter what your personal situation is, even if your income changes from month to month, you can still work out a good starting point for your monthly take-home pay:

  1. Add up your bank deposits for the last 3 months.
  2. If you have cash you don’t deposit, estimate an average week and multiply that by 13. (The number of weeks in 3 months.)
  3. Add those things together, and then divide by 3. That’s your average monthly take-home pay.

Step 2. Add up your monthly “have-to” bills

Your monthly “have-to” bills are things like:

  • Rent
  • Groceries
  • Electricity
  • Fuel for your car (or other transportation)
  • Loan payments

In other words, “have-to” bills include anything you can’t decide to skip. (Netflix doesn’t count. No matter how much you love Netflix, you could pause it for a month if you had to.)

These are also known as “non-discretionary expenses” or “fixed expenses.”

As you add up these expenses, be sure to think about things you might only pay for once every three months, every six months, or even every year.

For example, if you save money by paying your entire car insurance premium every 6 months, remember to include one-sixth of that amount in your monthly expenses.

If you add everything up and your expenses are higher than your income, don’t give up! A simple budget is one of the best tools you can use to turn your personal finances around.

After you create your budget, this guide will walk you through some helpful tips for making ends meet and even getting ahead.

Step 3. Add up your monthly “nice-to-have” expenses

Finally, you’ll want to add up your “nice-to-have” subscriptions and other expenses. Also known as discretionary, variable, or flexible expenses, these are the things you pay for every month but don’t technically have to have.

They include things like:

  • Streaming services
  • Monthly snack boxes
  • Gaming subscriptions
  • Food & wine clubs

It’s important to add these up because they’re charged automatically every month. If you don’t pause them, you’ll need to account for them in your budget.

How to Choose a Goal for Your Personal Monthly Budget

Your next step is to decide what financial goal or goals you want to work toward.

Of course, your first goal is to make sure your personal monthly budget actually works—that your income is higher than your expenses. Again, if you’re not there yet, don’t give up. That’s the best reason to make a budget!

Once your budget is working, try to find some extra money every month that you can put toward your financial plans. That might mean:

If you’re not sure what to do first, a good rule of thumb is to work in this order:

  1. Start by paying off short-term, high-interest debt, like credit cards.
  2. Take advantage of any employer matching funds for your retirement plan.
  3. Build an emergency fund.
  4. Work on longer-term goals like home-ownership or your kids’ college funds.

4 Simple Personal Budget Templates

1. The Goals-First Personal Budget Template

A goals-first personal budget is just what it sounds like: put some money aside for your goals first, every time you get paid. Then set aside enough to cover your fixed bills, and spend the rest on whatever you want.

If you’re just getting started and your income is higher than your monthly expenses, this is a great way to ease into a personal monthly budget. It helps you make progress toward your goals at any level that makes sense for you.

Experts recommend trying to set aside 10 to 20% of your income for your goals, but paying even $50 extra on a credit card every month can make a big difference toward reducing that debt.

Here’s the goals-first personal budget template:

  1. Choose an amount to set aside from each pay period and use it toward your goals.
  2. Set aside enough to cover your bills.
  3. Keep track of whatever’s left and spend it however you want to.

If you’re wondering how to keep track of what’s left, you’ll find that section at the end of this guide.

2. The 50-30-20 Personal Budget Template

The 50-30-20 budget is more like a set of recommended guidelines than a hard-and-fast budget. If you’re more interested in good spending “targets” than an actual budget, this personal monthly budget might be perfect for you.

Here’s the 50-30-20 personal budget template:

  1. Try to keep fixed expenses to 50% of your take-home income.
  2. Keep your discretionary spending at about 30% of your income.
  3. Use 20% of your income toward goals like paying down debt or building your savings.

If you’re already close to these numbers, you can probably make this budget work for you with just a few tweaks to your spending here and there. 

If you’re not, that’s okay. The best budget is the one that’s going to work for your situation, so don’t get caught up in goals that don’t fit. Instead, start where you are today and create a personal monthly budget you can reasonably stick to.

3. The Track-Every-Category Personal Budget Template

There are two ways to approach the track-every-category budget: the old-school way and the new-school way. 

The old-school way was born of a time when people kept track of money on paper in personal budget spreadsheets—and when stores were mostly specialty shops. You went to the butcher, or the grocer, or the hardware store. 

Back then, people often split their budgets into lots of small personal budget categories. The receipt from the grocer went for groceries, and so on.

You can still use a personal budget spreadsheet to track your spending, but it doesn’t make much sense in today’s world of Amazon and Walmart to break all your spending into super-granular personal budget categories. People go to one store for everything from cat litter to clothing.

Instead, the new-school way to create a track-every-category budget is to keep those categories at a higher level:

  • Car
  • Food
  • Rent
  • Shopping

It’s not an exhaustive list, but you get the idea. A track-every-category budget is a tougher template to create because you’ll probably want to modify it to suit your own needs. Still, this one is at least a good starting point.

Here’s a track-every-category personal budget template to start with:

  • Car/Transportation
  • Charity & Donations
  • Debt Payments
  • Education
  • Entertainment & Travel
  • Food & Home
  • Gifts
  • Health & Fitness
  • Savings
  • Shopping
  • Taxes

4. The “Spending Plan” Personal Budget Template

What’s a personal spending plan? It’s a kind of hybrid budget—something between a goals-first budget and a new-school, track-every-category budget that combines the best of both. 

A spending plan works in broad spending “buckets,” with the flexibility to let you spend your money however you need to while still keeping track of where that money is going.

Here’s how it works. Start with your income. Set aside the money you need for your monthly fixed spending and keep track of it in broad personal budget categories, like Rent and Food. 

With what’s left, set aside money every month for your goals, like paying down debt or building your savings. Create a separate bucket for each of those goals so you can keep track of your progress. That helps you stay motivated!

Finally, spend the rest however you want to. Just keep track of it in the same spending buckets so you can see what you’re spending it on, in case you want to adjust anything.

Here’s a spending plan personal budget template:

  1. Set aside the money you need every month for your fixed expenses.
  2. Categorize those expenses according to broad spending buckets. You can start with the ones in the track-every-category budget.
  3. Create goals to save up for anything you need, and set that money aside every month too. Keep track of your progress to stay motivated!
  4. Spend the rest on anything you want. Just keep track of it loosely in the same spending buckets so you can see where your money is going.

This last system is the hardest to keep track of without personal budget software or a personal budget app, but it’s also arguably the most powerful.

Why? Because the savings goals help you stay motivated, while the spending categories provide you with the information you need to make ends meet and find places to save.

How to Make Ends Meet for Your Personal Monthly Budget

If your fixed expenses are higher than your income, remember there are two ways to fix that:

  1. Find ways to make more money.
  2. Find ways to spend less money.

The simple act of putting a personal monthly budget together can be highly motivating when it comes to both.

Option 1. Find ways to make more money.

If you want to earn more money to help make ends meet, don’t overlook the job you already have. Making more of an effort at work and proving you’re ready for a raise or promotion is a great way to increase your earning potential.

Are you in a dead-end job? Spruce up that resume and start sending it out. Sure, it can be scary to put yourself out there, but it’s worth the effort not to get stuck in a job without a future. 

If you’re not doing something you love, try something else. It’s easier to succeed when you’re doing something you enjoy and care about. Can’t afford to leave your day job and start again? That’s okay, most people can’t. Instead, find a way to do it as a side hustle or part-time gig while you’re building your credentials, experience, and income. 

Don’t give up on your dreams! Just find a way to pursue them that makes sense financially.

Option 2. Find ways to spend less money.

Here’s the good news: when it comes to finding places to save, you’ve already done the hard part—figuring out all your current expenses. 

The first thing to do is look through that list and find any subscriptions you aren’t using or don’t really care about. Canceling those can save a surprising amount of money. (Fun fact: most people significantly underestimate what they spend on subscriptions every month.)

Once you’ve done that, look through the rest of your list and think about the things that are relatively easy to change. For example:

  • Cook at home more often instead of ordering takeout.
  • Try less expensive brands to see what you might like just as much.
  • Do more errands at once instead of driving back and forth.
  • Buy things in bulk, or take the time to look online for sales and coupons.
  • Set reasonable limits for yourself in the places where you tend to go overboard.
  • Take the time to compare rates for things like insurance and cellular service.

Your own best ways to save will be unique to your personal budget. If the things that are relatively easy to change aren’t enough (or don’t seem that easy), look at larger lifestyle choices:

  • Live somewhere less expensive.
  • Find a place with a roommate to share the bills.
  • Find a place with a gym and cancel your private membership.
  • Let go of things you don’t need and downsize.

Remember, if you’re in a situation that makes it hard to cut back, go back to option #1 and try to build your income instead. If you work back and forth between the two, you can usually find a way to make ends meet and work toward your long-term goals.

How to Track Your Personal Budget

Here’s the thing about personal budgets—they don’t work unless you stick with them. To do that, you need to track your spending consistently, every month.

Your banking app will tell you how much you’re spending, but it won’t usually give you a way to track your personal budget categories. It only keeps track of the total you have in your account, so it isn’t very helpful as a budgeting tool.

It’s possible to track your spending and savings in a personal budget spreadsheet, using an app like Google sheets, but remember that you’ll have to enter all your spending by hand. Still, if you have the time to do that, people have been using spreadsheets to track their spending for generations. 

If you’re going to use a manual personal budget spreadsheet, try to set aside time for it every day so the job doesn’t get too overwhelming.

On the other hand, for just a few dollars a month, you can invest in personal budget software or a personal budget app, saving yourself a lot of time. Software and apps designed for personal budgeting can connect to your accounts so you don’t have to enter all your spending yourself. Instead, the app enters your spending automatically and tracks it all for you.

Simplifi by Quicken, for example, is a personal budget app that uses the spending plan system, making it easy to get the best of both worlds—flexible spending and motivational savings goals that you can track in categories. You can even add your own tags, letting you organize and track your spending however you want to.

No matter how you decide to track your new personal budget, just be sure to choose a method you can stick with over the long run. Because if there’s one rule when it comes to your personal budget, it’s this: the best budget for you is the one you’ll actually use.