Budget building from the ground up.

Start With Nothing and Make It Something.

Building a budget isn’t a difficult task, but adhering to one is a different story. This is especially true for people who are on a fixed or limited income. Budgeting is an art and it requires impeccable attention to detail. Your budget should work for YOU, not because someone told you this template is best. A method of budgeting that might work for friends, might actually not help you at all. There are a plethora of different factors which will influence the structure of your budget and the amount of money you end up saving.

Budget building requires determining where you stand and your budgeting goals. Rest assured, we have articulated a list of factors which you should take into consideration before you start a budget plan. These factors will ensure that the budget you build will .

Determine Your Budget Building Goals.

The first factor to focus on is determining your budgeting goals. Every individual has their own personal goals aligned with their budgets, some people might be saving to secure their finances while others would want to save in order to buy something. You will need to ask yourself what are your personal goals with your budget, what are you trying to achieve?

So ask yourself, what are your budgeting goals and write this information down on a piece of paper. Writing it down will help imprint your goal in your mind and will expedite the success of your budget.

Consider your Revenues Streams.

This is probably one of the most profound factors which will influence the success of your budget. Before you can even consider creating a solid budget, you will need to evaluate your current revenue streams. If your source of income is limited to your current job or business, then this is your only revenue stream. Analyze the amount you make on a monthly basis and align this with your budgeting goals. This will help you understand what kind of budget will serve your purpose the best.

Furthermore, there are many ways out there to make more money, such as savings accounts, stocks and bonds. Try and increase your revenue streams. Even if you manage a small margin it will still help you in many different ways. Think out of the box and focus on trying to increase your income to reduce your chances of budgeting failure.

Distinguish Between Short Term and Long Term Budgets.

Distinguishing between short term and long term budgets is a prerequisite of success. Before you start budget building you’ll need to consider your budgeting goals. In addition, determine the time period you would like to achieve this in. For instance if you are planning on saving to buy a car, then you should consider the time frame you would like to achieve this in. Most people fail to adhere to their budgets as they might feel that it is taking too much time and effort without producing the required results. So set a realistic time frame in which you can achieve your goals.

Evaluate Your Current Financial Situation.

Financial experts always recommend that people should consider their current financial standings before preparing a budget. You should know what your current worth is and identify how much money you may have earned prior to your budgeting plan. Reflecting on previous earnings, savings and expenditures will help you identify key mistakes that you might be making and will help you build a budget which induces prominent results.

Start by thinking about all of the money you may have earned in the past six months and evaluate how much you ended up saving. Rest assured, even if you feel that you are not in a strong position it does not matter because you have already made the choice of strengthening your financial situation by starting a budget.

These four factors are crucial to the success of your budgeting plan. Before you start a budget, it is imperative that you consider the factors outlined. sound budget which will produce the required results. This is exactly why financial experts have constantly laid emphasis on these factors and how they can affect the overall outcome of your budget.

Now that you know about the most crucial prerequisites of budget building, we can now move on to the more challenging part: creating the architecture of your budget. To make this possible, here are a list of steps which will help you start your budget plan.

Step 1: Consider All Of Your Expenses.

The main reason most people fail to save any money at the end of the month is because they have trouble finding balance between expenses and income. A common mistake most people make is simply paying their expenses as they come, rather than allocating a specified amount for this expenditure. Paying your expenses this way makes makes it very difficult to track where your spending is suffering. All you need to do is get a hold of a pen and paper, then start writing down all of your monthly expenses:

  • Commune expenses
  • Food expenses
  • Rent
  • Debts

This list given above is just a glimpse into the array of different expenditures which an individual may have to incur on a monthly basis. You should write down each expense which you have to pay on a continuous basis and make sure you leave no stone unturned. Take your time and really think this step through as all of your efforts may be thwarted simply by not considering your expenses effectively.

Once you are sure that you have taken all of your expenses into account, calculate the entire amount and write it down in bold figures. We would also recommend that you allocate a small amount for miscellaneous expenses which can cover any unexpected costs. By now you should know exactly how much money you are spending on a monthly basis and can move onto the next step.

Step 2: Set Aside Your Expenditure While Building a Budget.

This step is without a shadow of a doubt one of the most important steps in helping you start a budget. Since you have already identified the exact cost of your expenses, it is recommended that you set aside this amount at the very start of the month. If you earn in cash then simply set the amount aside and pay each expenses when required however, if your monthly income is deposited in your account then we would recommend transferring the specified amount to another account.

The remaining balance will automatically become your saving and each time you spend money you will clearly see how much of your potential savings are you burning through. Clearly dividing your income into predetermined groups is the key to budgeting success, both for long term goals and short term. If you feel that dividing your income is difficult, consider opening a new bank account to fully separate the two income categories.

You will now need to allocate a daily budget for yourself, this will not include your expenses but is just a contingency amount for you to spend on yourself if required. For instance, if you have allocated five dollars for yourself everyday then make sure that you never exceed this amount. Yes, outings with friends or family may hit this daily budget but just by keeping track of these expenses will help you save money in the long run. Avoid all unnecessary costs and set aside a realistic amount which you can spend on yourself without hurting your savings.

Step 3: Get All The Help You Can.

We live in a digital era. Everything we need is at our fingertips and this can actually empower us to achieve anything. Most people prefer the old school method of budgeting which is admirable if they are successful but they are actually putting themselves at an unnecessary disadvantage.

There are thousands of tools and apps brilliantly designed to help people both start a budget and adhere to one. These apps can easily be downloaded to your phone, laptop and tablets. Plus, most of these platforms are offered free of cost. We would recommend trying at least three of them before deciding on which app will best help you. These apps are engineered to perfection and can actually help make budget building a piece of cake. Some of the most significant benefits of using this technology in budget building are mentioned below.

  • User friendly interface
  • Provides insight regarding expenses, income and savings
  • Push notifications will constantly remind you about your budget
  • Will help you create a clear picture of your current financial situation
  • Helps keep track of your progress and can identify areas for improvement

Step 4: Constantly Remind Yourself  Why You’re Building a Budget.

Once you start a budget plan, you’ll realize how easy it is to forget about your goals when you want something. Even with the most advanced app out there, your budgeting goals will fail without consistency.

Yes, this may mean curbing your desires and letting go of outings which may hurt your budget. But, you need to remember that you are doing this for yourself. The amount you save will contribute to your goals and nothing can beat that level of satisfaction. Remember there is no harm in going out and buying yourself something, but moderation and control is key.

These steps mentioned above will definitely help you start a budget plan. This will not only help you save money but will help improve the quality of your life. Within a few days you’ll realize just how beneficial and important budgeting really is. Especially in improving your financial situation and achieving your goals.

The journey will be challenging. Then again nothing good in life comes easy, you need to work hard and remain dedicated to your cause. At the end of the day your budgeting success depends on how well you adhere to your plan. Try it for a month and the benefits will keep you hooked for the rest of your life.


As always, budgeting is one piece of your full financial picture. High interest debt makes budgeting difficult.  It’s a debt you’ll continue to pay without making much progress. Every month you pay interest, which is money gone for no reason. Understanding how to plug these leaks is key to a well rounded financial plan. If you’re carrying $5k of credit card debt or more, speak with one of our licensed debt consultants to hear your options.


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