Start Saving Now: 4 Easy Steps to a Stress-Free Budget

Woman in a blue sweater and black pants sitting on couch, holding receipts in her hand.  Laptop sitting on coffee table beside of a calculator and notebook.  Photo used for simple budget post.

You’ve probably heard that using a simple budget can help you get off the cycle of living paycheck-to-paycheck.

But, how do you start using a simple budget?  

This basic guide will show you step-by-step how simple budgeting can help you keep track of your income and expenses. Let’s start with the first simple step on how to start a simple budget!


What is a simple budget?

A simple budget is a guide that helps you keep track of the very basic categories of your income and expenses. It is a plan that you make for every dollar that you make and spend. You don’t have to have an accounting degree to start using a budget.

The simple step of creating a household budget alone is going to make a world of difference in how organized you are with money, which will allow you to learn more about your habits and create plans to help you in the future with budgeting.

As you start becoming more experienced with budgeting, you may want to break down your household expenses into very specific categories. Budgeting is entirely customizable to what your specific needs are for your finances.

Using a budgeting apps helps!

You do not need any fancy software or an accounting degree to create a simple budget. In fact, we are suggesting doing it with the help of some old-fashioned tools: pen or pencil and paper!

But if using a phone app is more of your jam, there are a lot of simple budgeting apps out there that you can look into.

Here are some of the top budgeting apps that will help you start a simple budget.

There are so many budgeting apps available on your smartphone! Just check out the app store to find one that you might like. You can’t forget to update your budget if it’s right there in front of you! It’s right there on your phone!


This post may help you start saving.


How do you start a simple budget?

With these budgeting tips, you’ll be able to create a manageable budget that puts an end to the living paycheck to paycheck cycle.

Step #1: Decide to start a budget and stick to it!

Think you don’t have time to start using a budget? Think it is going to be too hard to stick to it?

It can be hard at first, but once you’ve gotten into the swing of things, budgeting will become second nature.

After all, creating a budget is something that everyone should do to save money and prevent the cycle of living paycheck-to-paycheck. You owe it to yourself!

After you’ve made the simple choice to start simple budgeting, it’s time to just do it!

It only takes about 30 minutes of your time each week or month, depending on how often you choose to review your simple budget. You can set simple reminders on your phone so you don’t forget. The choice is up to you!



Budgeting is not a one-time event. It’s an ongoing process that must be followed every month in order for you to stay on track with your finances and avoid breaking any spending rules!

Yes, you read that right – EVERY MONTH!

It’s important to stay on top of the balance because there will always be some unexpected expenses coming up that might throw off everything in our budgets!

Step #2: Set up your monthly budget template.

You’re going to need a simple budget template. We have one here for you that you can use as an example and work with what’s on the paper!

Here’s our simple budget sheet:

Sheet of paper with a simple budget written on it for the blog post "How to Start a Simple Budget in 4 Easy Steps" on The Frugal Housewife.

  • The first section of the budget template will be used for your income. This section will have six columns labeled as follows: Source, Amt. Expected, Date Expected, Amt Rec’d, Date Rec’d, and Totals. Leave some space for unexpected streams of income. They will need to be included also on your budget.
  • The second section will be used for expenses. This section will take more space on the template and will be broken down into three sections — Fixed, Variable, and Periodic.

All expenses fall into one of three categories – fixed, variable, and periodic. An example of a fixed expense is the rent or house payment. It’s going to occur every month and it’s usually the same amount.

An example of a variable expense is eating out each month. The amount changes from month to month depending upon how much you eat out. This one may sting a little when you see the amount. Most people don’t know how much they are spending each month on eating out.

A periodic expense would be renewing your driver’s license or your yearly car inspection. This is one of the reasons you need to do a monthly budget. You won’t have the same yearly expenses each month.

  • Make two columns. One for the budgeted amount and the other for actual amounts spent.  
  • Write down all of your monthly expenses categories that you can account for. Think about the necessities like rent or mortgage, utilities (gas, electric), cell phone contract, internet bill, etc. But don’t forget to also include things like insurance (car insurance, health insurance). For example, listing “groceries” or “clothing” as a simple category can work just fine. You need to know how much money you spent on each specific expense so you get an idea of where your money is going each month.
Piece of white paper with the words "Budget" and "Expense" written on it in blue.  A calculator is sitting at the top of the picture.

Step 3: Figure out your monthly income.

Figure out how much total income you receive in a month from all sources.

Make a list of all your income sources and write down the amounts that you will be paid after taxes. Also, write down the date you expect to be paid.

If you work for someone else, then you can use either your last pay stub or a simple online paycheck calculator to find out the amount of income that will be deposited into your bank account from your employer.

If you are self-employed and freelancing, then you’ll need to know how much earned income (income earned from your job) you’ll make after taxes.

You’ll also need to figure out how much income (if any) you’ll receive from other sources.

Other income sources may include:

– a paycheck from your side-job(s)

– child support or alimony payments

– benefits from government programs such as SSI or TANF

– rent from an apartment or house that someone else lives in

– interest from a savings account or an investment



Step #4: Track your expenses.

This is the step where most people get frustrated and give up — tracking your expenses (spending).

You can find the amounts on your receipts (if you’ve saved them), bank statements, and credit card statements. Separate them by each category and total them up and enter each amount into the budget template.

Once you’ve entered the actual information into your simple budget template, you’ll compare your income to your expenses and come up with budgeted amounts you can live with each month.

Calculate the difference between your income and your expenses by subtracting your expenses from your income.

How to use what your simple budget is telling you.

Now that you have completed a simple budget you should take a good look at what the information on your budget is telling you.

It may be a little hard to digest at first but once you get over the shock of seeing where your money is going, simple budgeting can be a powerful tool for you to use to make your money work for you.

Let’s dive into what your budget is telling you:

  • If your income is more than your expenses (positive number), then you are in good shape! You have money left over for savings or to spend on things that you want. Congratulations!
  • If your expenses are more than your income (negative number), then you don’t have any money left over and you will need to make some adjustments somewhere. If you don’t have enough income to cover all your expenses, then it’s a matter of cutting back on some things or getting another stream of income. If you chose to cut expenses, you’ll need to choose which expenses are the most important and focus on cutting back or eliminating the least important ones.
  • If your income is equal to your expenses, then you won’t have any money left over either and the simple budget template will say “0 dollars remaining.”

If there is a difference or you are spending and making the same amount, then you will need to adjust accordingly with either spending less money (cutting back) or increase your cash flow (making more).

For example, simple spending cuts that can help would be buying groceries instead of eating out, biking or walking when possible instead of driving, and getting clothes from the thrift store instead of paying full price for new clothes at the mall.

Being savvy with simple tools such as a simple budget template will allow you to monitor where your money goes at what time.

As simple as that is, simple budgeting can help you significantly improve how much money you actually have in the long run. As your simple budgeting steps start to grow, so will your savings account!


We didn’t forget the last step! Figure out your budgeted amounts.

You are going to take how much you spend each month and figure out a budgeted amount that you can live with each month for each category.  

Set yourself a realistic goal that works with your current income and expenses.

Be honest about each category. For example, don’t say you’ll only spend $100 on eating out when your monthly eating out budgeted amount should be closer to $400.

Focus on simple savings cuts here and there. Be sure to write your budgeted amounts in the “BUDGETED AMT.” column.



Budgeting is only as hard and complicated as you make it.

There are several ways to create a budget. We prefer to keep things as simple as possible. For us, this is the way to do it because we don’t like budgeting but it’s a necessary thing for our peace of mind.

You may want to use a budgeting app. There are several to choose from. Some are free and some have a monthly charge. Be sure to check their safety features to keep your information safe.

Takeaway Point: The takeaway point for this post is to get determined to start a budget and stick to each month so that you can get rid of the stress of not knowing where your money is going and why you are always short at the end of the month!

More frugal budgeting tips:

Don’t take a long time mulling over which column to put the expense in. You can always change where you put the expense if you put it in the wrong column.

As you start becoming more experienced with budgeting, you may want to break down your household expenses into very specific categories. Budgeting is entirely customizable to what your specific needs are for your finances.


Are you going to start budgeting? Which method are you going to use — paper or a budgeting app? Leave us a comment! We’d love to hear from you!

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