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Early retirement . . . traveling the world . . . paying off student loans . . . buying your dream car. . . . What do these things have in common? Budgeting can make them all easier to achieve. But where do you start?

Good question! And we’ve got your answers. Budgeting isn’t as complicated as it may seem—and it can go a long way toward achieving both your short-term and long-term goals. Read on for our easy-peasy budgeting basics to-do checklist.

Your Budgeting Checklist

1. Find your income

Your “income” often means the money you make at a job, but not always; in fact, it means all the money coming into your bank account each month—no matter where it comes from. So, your income is the monthly paychecks from your job plus any other side hustles you might have, like babysitting or your homemade jewelry business. Go through and add up every dollar that regularly comes in. Look for pay stubs, and regular deposits into your bank account. Most people have a fixed amount of money to work with each month, and that makes things easier. If your income isn’t fixed—for example, if your weekly hours vary or if you’re a contract worker or freelancer—add all of your income together from the past six months and divide by six to determine your average monthly take-home pay.

2. Map out your expenses

Next, you’ll want to see where your money is going. Expenses include basically anything you spend money on, from rent and groceries to your morning coffee, your car insurance, movie streaming services, etc. Separate these expenses into a few categories within your budget. Now, calculate how much you think you should spend for each category. Here are a few example categories:

  1. Monthly rent/mortgage and bills such as gas, water, electric, car insurance, health insurance, etc
  2. Groceries
  3. Food (dining out and ordering in)
  4. Entertainment (movies, concerts, etc.)
  5. Miscellaneous shopping
  6. Debt payment (credit card, student loan, car loan)
  7. Savings

This can be tricky! Creating too few categories can make it hard to see where spending can be adjusted. But don’t go wild, either; too many categories can make your budget hard to keep up with. Somewhere between five and ten categories usually works well. Just be sure to customize the number and types of categories that work for you!

 3. See where you can cut back

Now that you know where your money is going, and you’ve estimated how much you want to spend in each category each month, see where you can cut back—starting with an expense category, then moving to the next. It’s best to start with the categories that are the most fixed and nonnegotiable. For example, your rent and bills are likely the same each month.

Once you’ve determined this fixed amount, move on to the more malleable categories. Try “Food” for example: Are you dining out three nights a week? Try cutting back to one night. Are you overspending on groceries? Try making a list, clipping coupons, and looking for deals. Go easy and be patient; slow and steady changes to your spending habits are usually more sustainable than drastic slash-and-burn strategies.

4. Set some bigger goals

Now it’s time to start planning for some real, sustainable change. What’s important to you? What could you do if you had more money? Turn these thoughts into concrete goals. Remember, the best goals are SMART goals. That is, they’re: 






This means you set a specific and measurable amount so you know when you’ve hit your target. Make sure the goal is something that’s action-oriented—something that’s within your power to control, not something you passively sit back and watch happen. Make sure it’s realistic; you don’t want to set goals that will be impossible (or super stressful) to achieve. And you’ll want to make them time-bound, meaning you should set a definite target date for when you’ll want to complete the goals.

So, a simple goal like “be prepared for emergencies” won’t do the trick. Strive for something more concrete, like: “I’ll set $250 aside each month, so that in exactly 12 months I’ll have  saved $3,000 for emergencies.” A couple of more examples include: “I’m currently spending $170 a week on restaurant meals. If I stop eating out, after a year I’ll have saved over $8,000—enough for a trip to Mexico.” Or: “I’ll stop charging purchases to my credit card, and I’ll pay $100 extra toward my credit card debt each month. If I do this, I’ll have it paid off in 24 months.”

Need more help coming up with a goal? Three common ones are: Save money for retirement, create an emergency fund, and pay off debt. Whatever your goal is, include it in your budget. Having a goal allows you to track your progress, and it gives you something to work toward, and track progress on—both factors that can help you stay motivated and successful.

5. Adjust as you go

Is your budget  working? If it’s not, that’s okay! Did you meet your goals fairly easily? Great! The fantastic thing about budgeting is that it’s customizable. If you’re struggling to stick to your budget, revisit your categories and allowances. If you’ve met certain goals, that just means it’s time to set new ones. Budgeting is never “done,” but you can most certainly get better at it. The sky’s the limit.

Bonus tip! Paying off your debt is a great—and often necessary—first goal. Being debt-free can help make budgeting a lot simpler by freeing up income to put toward more lofty goals. However, if you have an overwhelming amount of debt and are struggling to make your payments each month, setting even the simplest of goals can feel out of reach. First of all, know that you’re absolutely not alone. And the good news is, there’s help available. 

CreditAssociates can help you become debt-free for less than you currently owe— in as little as 24-36 months. We know we can do it, because we’ve spent years helping thousands of people just like you. Our certified debt consultants can walk you through our process and provide a free, no commitment debt evaluation. This is a perfect, risk-free way to see if we’re a good fit for you. Fill out our online form or give us a call today at 1-800-983-6693.