Why most budgets fail
- They're too complex, too strict, or ignore real habits.
- The fix: keep it simple, automate, and review monthly.
Step 1: Map your money (net income)
- Use last 2–3 months of pay stubs and deposits.
- Average irregular income with a "baseline" (more on that below).
Step 2: List essential expenses (needs)
- Housing, utilities, groceries, transport, minimum debt payments, insurance.
- Add annual/quarterly items as monthly "sinking funds."
Step 3: Prioritize goals
- Emergency fund → debt payoff → retirement → big purchases.
- Assign target amounts and deadlines.
Step 4: Set spending plans by category
- Start with 10–15 categories max.
- Give every dollar a job (zero-based or 50/30/20—your choice).
Step 5: Automate & track
- Auto‑pay bills and auto‑transfer savings on payday.
- Track by "accounting for outcomes," not every latte: weekly category check‑ins.
Example starter categories
Housing (30–35%)
Utilities (5–10%)
Food (10–15%)
Transport (10–15%)
Insurance (5–10%)
Debt (10–20%)
Savings/Investing (10–20%)
Discretionary (5–15%)
Monthly review ritual (15 minutes)
- Check what worked/overran.
- Move surplus to goals or cover shortfalls.
- Reset category amounts for next month.
Pro tips
- Separate accounts: bills, spending, savings.
- Use a "buffer" category for surprises.
- Keep a 1‑page budget; the best budget is the one you'll use.
Frequently Asked Questions
How long until it "sticks"?
60–90 days. Expect adjustments.
Do I need an app?
No. Bank alerts + a simple tracker works.
What if my income is variable?
Build using your conservative baseline and add "top‑up" rules (see Article #3).