[Budget] How To Create A Monthly Budget and Save Money

The good news is that creating and keeping a monthly budget doesn’t require any sophisticated formulas. In fact, you just have to keep track and pay attention to bills & expenses. Then you can do a budget with a pencil & a sheet of paper or using an Excel table. Add also a small flavour of common sense and don’t fall monthly for the labels that say on sale.

Step 1: Add up your Monthly Income

List all of your income sources and totals at the top of your table. Include income from every source you can think of: monthly paycheck, child support, business income or freelance gigs. Then – deduce the taxes, your income is always calculated after taxes.

Step 2: Current Savings

Have a separate column for current savings – a solid financial approach should mean that at least 30% of your income goes there.

Step 3: Keep record of all of Your Monthly Expenses. Use Categories

You should use the categories that represent significant expenses in your budget – like rent/mortgage, utilities or transport. Then delete those categories which do not belong there OR add any important categories which may be missing:

Note: This does not represent an actual budget, but it is an example using an Excel tabel so you can see how we can keep track and compare monthly expenses.

Here are some examples of expenses:

Saving: Economy fund, Emergency fund savings, vacation fund, etc.

Housing: Rent, mortgage, home maintenance

Utilities: Electricity, Gas

Car expenses: Fuel, highway tolls

TV & Netflix: TV provider, internet and Netflix

Mobile Expenses: Monthly telephone bill / top-up amount

Extra transport / Commuting: Bus, Train

Home goods, Clothes & beauty: Home goods & improvement solutions, clothes & beauty hauls

Going out: Restaurants, pubs expenses

Health: Gym, medical

Step 4: Divide your expense using a Pie. Yes, a Pie

Do you want to know how much utilities or TV take from a slice of a pie? Use again Excel and see in percentages

Step 5: Add your Total Expenses and Subtract from the Total Income

If the final number is negative then you probably have a spending problem at the end of the month, and by looking at the difference between the budget expenses and the actual expenses you can see where is the problem.

Step 6: Review the Spending defaulters

Of course, this can be corrected by adjusting your spending on non-fixed expenses. In this category we include Home improvements or Clothes & beauty product, if these expenses are recurrent every month.

In the same time, if you see that the number obtained is positive – you have extra money after the monthly expenses this does not mean you have to spend them all. Try to put them in the savings account as a habit.

Step 7: Understand your expenses: Fixed vs Variable

Fixed expenses > Housing expenditure or utilities are monthly and not debatable. If you are looking to cut some cents don’t even think of this categories.

Variable expenses > Going out or Home improvements & Clothes are the categories that you should have an eye out when deciding to reduce the spending.

The good news is that your budget is 100% dependant of what you want to achieve at the end of the month: do you want to save some extra cents or add a good amount in the savings account or maybe buy some books or refresh the wardrobe? Remember that a budget is like an essay draft in school. You will to form a habit to correct it and write down any extra expenses.


After half a year you can look back and analyse what you did wrong, what you did good, what needs to be done further.

After housing (mortgage/rent, etc), people spend the biggest portion of their budget on groceries – either going to the store, either online – you gotta eat, right? My favorite way to do groceries is to buy directly from producers, have a mix of seasonal veggies and save money >> Seasonal veg boxes on the rise. Top 5 veg boxes around Ireland

Second to groceries, expensive TV, internet & Netflix can add extra at the end of every month, especially if you struggle to do some savings or living on a low income. I recommend to negotiate your bills and always go with a dual – offer meaning TV services + Internet. Currently with a good price you can get also Netflix included in the monthly bundle with Sky TV.

Dear readers, how do you plan your monthly budget? Do you use Excel charts or Notebook and pencil? Do you always add the extra expense in the sheet or how do you manage to save money? Share your thoughts and any questions in the comments:)

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