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A new year has many things to love, including the opportunity to start off right when it comes to budgeting!

Now, if you’re wondering how to make a budget, keep reading! We’ve got your back.


Some people hear the word budget and shut down. That used to be me – so I completely understand the feeling! But, when I learned a few simple steps to budgeting, it all clicked. It wasn’t so overwhelming anymore. If you’re not using a budget now, I hope these tools help you learn how to make one…and see how easy it is to start!


Tip: I like to call it a “spending plan” rather than a budget.



How to Make a Budget: Phase One

  1. Make a list of every category you spend money on (groceries, utilities, eating out, rent, etc.).
  2. Under each category, list every expense you remember spending money on in the the last three months.
  3. Pull your last three months of bank statements (or even easier, pull up your online banking to see your transactions) and review each charge – is it listed on the expense sheet you created in Step #2? If not, add it!
  4. Set the list aside for the night, come back tomorrow and review it – what did you forget? Now is the perfect time to add it.
  5. Determine how much money is your “take home,” meaning the money left after taxes, insurance, 401K and all other deductions come out of your paycheck.
Those five steps get you started. The next steps are putting the above information down into your working budget.


How to Make a Budget: Phase Two

  1. List your monthly take home income. (**If you do not know your monthly take home income – it is easy to figure out. If you are paid twice a month, take the amount you get on your paycheck and multiply it by two; this will give you your take home income. If you are paid bi-weekly, I still recommend you take the amount you get on your paycheck and multiply it by two. Technically there will be two months in the year that you get three paychecks in that month. For budgeting, take the “extra” paycheck during those months and put it directly in savings.)
  2. List the categories under your income, leaving room under each category for each of the expenses in that category.
  3. List each of the items in each category and the amount you spend on it monthly.
  4. Make a sub-total of each category and then a grand total for all expenses.
  5. Subtract what your expenses are from your take home income.


If you have money left over, that is a good sign!


As long as you live by your spending plan, you won’t have to use a credit card to pay for something or have to go negative in your checking account. If you don’t have any money left over, evaluate your expenses to find ways to reduce your expenses or increase your income.


I promise if you start creating a spending plan – you’ll start telling your money what to do rather than letting it tell you what to do! And, you will have so much more freedom!


Now that you know how to make a budget, click here to download our Budget Template to start your budget!


If you need or want help, call to set an appointment with one of our Certified Credit Union Financial Counselors to help you get the process started.


Michelle Small is CEO of Kelly Community FCU and is on our team of Certified Credit Union Financial Counselors. 

Kelly Community FCU Financial Councelors

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