Making a Budget

Making a budget is an important step in keeping track of your money. Within a budget, you record your income (the money that you earn or is given to you) and your expenses (the money you spend). You then have a visual of how much money you can expect to have for the month and plan how much you can spend.

Rules of Budgeting: 50/30/20 Rule

The core rule of budgeting is to spend less than you earn. The 50/30/20 Rule is a helpful guide to ensure you have money for your needs, wants, and savings!

Here’s where the 50/30/20 Rule suggests you direct your income:

Percent of Income Category Definition & Examples
50% Needs Necessities such as school supplies or your cell phone bill
30% Wants Items or activities that you enjoy such as going to see a movie with friends or buying new video games, music, or jewelry
20% Savings An emergency fund for unplanned expenses and saving for college, trade school, a car, or other goal

Structuring Your Budget

  1. Determine your Income
    1. Estimate all incoming money, including earnings from a job, allowance, birthday money, etc.

  1. Estimate the cost of your needs
    1. Make a list of everything you need to pay for each month. Then determine what percentage of your income will need to go to your needs. Though the 50/30/20 Rule suggests 50%, you may need to allocate more (or less) of your income to your needs.

  1. Determine how much to save
    1. After covering your needs, how much of your income do you have left? Allocate a portion of that to your savings. It might be 20% of your total income, as the 50/30/20 Rule suggests, or a little bit more or less. Whether you are saving for something specific or just tucking money away for the future, it is important that you get in the habit of saving! Even a few dollars each month helps.

  1. Estimate what you have left for wants
    1. After you have paid for the things you need, you can use the money left over for some fun! These expenses may include going places with friends or buying any items that you consider optional.

Review the following sample budget to give you an idea of what yours might look like. Then make your own monthly budget. You can write in your estimates at the beginning of the month, and then the actual amounts at the end of the month. The calculator can give you an idea of the amounts you could allocate toward needs/wants/savings based on your income. Stay within your budget, make sure you continue to save, and you will always be in control of your money!

Sample Monthly Budget  

Income Estimated Amount Actual Amount
Allowance $40 $40
Money from working $30 $30
Gifts $10 $20
Income Total $80 $90
Expenses Estimated Amount Actual Amount
Savings $20 $20
Cell phone $10 $10
Clothes $15 $12
Video games $10 $0
Snacks $10 $18
Movies $15 $12
Expenses Total $80 $72
Income Minus Expenses $0 $18

Download a copy of this sample here.

Monthly Budget Worksheet

Income Estimated Amount Actual Amount
Income Total    
Expenses Estimated Amount Actual Amount
Expenses Total    
Income Minus Expenses    

Download a copy of this worksheet here.