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Creating a budget for yourself is the most important step of your debt-free journey. A budget is how you maintain your spending and tell your money where to go; I mean every penny. When I was deciding on which step to place Create A Budget, I couldn’t decide on whether to make it step two, three, or four. 

After consulting with my husband, I decided to make it step 4 because I wanted you to figure out how much debt you had and what method of tackling your debt first so you will know how to implement it in your budget. This makes it easier for you to know which debt you are going to focus on for each monthly budget you create.

In this post, I will share with you different ways to create a budget, so you can choose a budget that fits you.

We Will Discuss:

  • What is a budget?
  • How to get started with your budget?
  • Tips for Success with Budgeting
  • Common Questions About Budgeting
  • The Last Thing You Need to Know About a Budget

“This post contains affiliate links, which means I receive a small commission, at no extra cost to you, if you make a purchase using this link. Please see my disclosure for more details.”

What is a budget?

A budget is a monthly spending plan that is based on your estimated monthly income and expenses for the month. The budget that works best for me and what I highly recommend is a Zero-Based Budget. 

A zero-based budget is a budget you plan before the month starts by using your expected income, subtracting all your expenses for the month, and tell your money where to go, until you have a balance of zero.

For example, let’s say you get paid $1300 on the 1st of the month and $1400 on the 15th, which will equal to $2700 monthly income coming in for your household. (If your spouse has income coming in as well, you should add his income as well.) 

Then you will subtract all your monthly expenses; this will include: groceries, cable, rent, car payment, tithing & giving, saving, etc. Once you have subtracted all your monthly expenses and if you have a zero balance, then you have an equal balance of income and monthly expenses. 

If you end up with a negative balance, then you are overspending, and you need to find ways to cut some expenses. If you end up with money left over, then you can use this money to put towards your emergency fund or paying down your debt. 

This may sound complicated, but it’s not that hard to do. The hardest part is following your plan; I fell off my budget a couple of months before I got the hang of it.

Now before I get into how to get started with your budget, I want to clear up some common misconceptions about a budget.

  • A budget restricts you from doing what you want to do. A budget does discipline you to spend your money wisely, but it does not keep you from doing the things you want to do. If you have a plan to go to a concert, just ensure that you include that in your budget. The key is to budget what you want to do but, at the same time, making sure you are taking care of your monthly needs each month.
  • You only need to plan your budget once. Every budget will not be the same each month. There will be times when unexpected expenses will come up, things that you may want to do with your family, holidays, birthdays, etc. Having these expenses is what makes every monthly budget unique.
  • You can’t make a budget on commission-based income. Getting paid on commission is a little tricky because you do not have a set amount of income that comes in each month. The good news is that you can still create a budget on commission-based income. You will just plan your budget by averaging your last three months’ commission checks. Once you get paid and if it is not as much as you expected, then you will rearrange your budget to reflect your check until you have a zero-based budget.

How to get started with your budget?

Now there are a couple of ways that you can start your zero-based budget; you can use an Excel spreadsheet or a budgeting software online or an app. Below I will share with you different methods of creating your budget so that you can choose which one is for you.

Old School Method Pen and Paper

Since the world is so advanced in technology nowadays, budgeting online is the most common way to budget, but sometimes writing your budget out on paper could help you feel how real and essential your budget is each month.

Budgeting and tracking your spending with pen and paper makes it easier for you to stay organized, instead of having to write your spending down on paper and then turn around record it on your computer or budgeting app. Budgeting this way will be beneficial for you if you do not like giving out your bank information.

I’m currently testing out a budget planner I purchased from Amazon, and I will be providing a review on it once I hit 30 days with it. If you would like to check it out, you click here.

Excel Spreadsheet

Using an excel spreadsheet is a method that I find the easiest to manage my monthly budgets. The thing I like about Excel is that I can create a budget the way I want, and I don’t have to give up sensitive information like my bank account number to get started. 

When you create your budget, you want to include your income, all your expenses for the month, and ensure that your ending balance is zero.

If you need an excel template to get started, click here to use the one I created and use every month. When you click on the link, it will take you to a google spreadsheet, so make sure you save a copy to your computer.

Envelope System

The envelope system is another method of budgeting your money by using cash and envelopes. Each envelope will have a category written on it for each monthly expense you have along with the budget amount you are trying to stick too. For example, you will have a category for rent, food, gas, utilities, entertainment, etc. When you receive your paycheck, you will budget cash for each monthly expense envelope.

You will only spend the money that you set in the envelope for each category; you will not use money from other categories because you ran out of funds from one category. For example, if you run out of money for your food envelope, you will not use your gas envelope cash to replenish your food envelope. When the money is gone, it’s gone.

If you struggle with sticking to your budget, the envelope system is an excellent way to stay within your budget and discipline your spending habits. You can create an envelope system by buying envelopes or order fancy ones online.

Every Dollar


Every Dollar
is an online budgeting software and app that you can use to create your zero-based budget. Every Dollar was created by finance guru Dave Ramsey. You can get started with Every Dollar for free, and you do not have to input your bank account information. 

The free membership includes adding your income and planning your monthly budget. Dave also offers an upgrade to the free membership called Every Dollar Plus, which includes everything in the free membership, but you can connect your bank to track expenses for the month and add them to your budget.

Every Dollar Plus offers a 14-day trial then billed annually at $129, or you can download the app and pay $10 a month.

I recommend Every Dollar because it is the next best budget that I would use if I was not so hooked on my excel spreadsheet budget.

You Need A Budget


You Need A Budget (YNAB) is another online budgeting software and app to create your a budget. The difference between YNAB and Every Dollar is YNAB educates you more on your budget by offering advice and tips to get out of debt. 

You have the option to add your bank information or enter your expenses and transactions manually. You can try YNAB for free for 34 days, and then they offer a monthly price of $12 or $84 annually.

YNAB also offers free classes on budgeting, credit cards, debt, savings, and more. They also provide reports on your progress and helps you set up goals for your future financial plans.

I recommend YNAB because of their education, advice, and tips. 

Tips for Success with Budgeting

To be successful with your budget here are a couple of tips you need to remember:

  • Every month is different.
  • Stick to creating your budget monthly, set a specific time and date. 
  • Focus on your emergency funds first. (We will get into this in the next step.)
  • Focus on your debt pay off method.
  • Do not add to your debt.
  • Cut some expenses if needed.
  • Remember, setbacks do not mean you fail, fix your mistake, and keep moving towards your goal.
  • Celebrate your small wins. 

Common Questions About Budgeting

Should I tithe and give when I’m on a budget and paying off debt?

If you are a Christian like I am and put God first in your life, you will know that you are supposed to give the first of your fruits (income) to the Lord. You can read this in Leviticus 27:30 and Proverbs 3:9. Tithing is 10% of your income. When tithing, you want to budget this before your monthly expenses. Although tithing and giving are optional, it gives you the discipline you need to put God first and learn how to be generous.

What is a list of expenses I should include in my budget?

When creating your budget, somethings you want to include are rent, mortgage, insurance, utilities, student loans, personal loans, car payment, daycare, etc. Your budget is based on your monthly expenses each month, and you will use your emergency funds for unexpected costs, such as car repair, medical emergency, family emergency, etc. When taking out of your emergency fund, you need to plan on how you are going to get your balance back to your emergency fund goal. Replenishing your emergency funds prepares you for other unexpected emergencies in the future.

What if I overspend on my budget?

question mark, note, duplicate

If you are following the plan of your budget and telling your money where to go to the very last penny, you should not overspend on your budget. There will be times when you don’t feel like cooking; you need to purchase a birthday gift or any other unexpected expense that might come up. When this happens, ask yourself is this a need or a want. Do I really need to go off my budget because I don’t feel like cooking? Do your best to stick to your budget and let everyone you are close to know what you are trying to accomplish. Having others in the know will help you stay on track.

My husband helps me out a lot when I ask him if I should or not buy something. I don’t know what it is with asking him, but I start to realize that it is something I don’t genuinely need.

Should I still save when trying to tackle my debt?

If you do not have money set aside for emergencies, then I recommend you start saving until you have at least $1000 in savings before you start paying off debt. Once you have your emergency set aside, then you should be able to start paying off debt, and if any emergencies arise, you will have money to take care of them and still pay off debt.

The Last Thing You Need to Know About Budgeting

Creating a budget can be hard and overwhelming at first, but once you get in the groove of doing a budget for each month, it will get easier. In my case, creating a budget was more natural to me. Sticking to your budget is the hard part, but this will get easier with practice and as you start to pay off your debt. 

If you have any questions about the methods or questions I mentioned above, please leave a comment below or contact me. I look forward to hearing from you.

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