How to Create a Simple Monthly Budget That Actually Works

Your finances can be managed simply. The most helpful budgets are not complicated, are attainable, and match with your everyday life. No matter if you are short on cash every month or wish to manage your finances better, the guide here will show you how to plan your budget in an easy and stress-free way.

The first important step is to find out your after-tax income.

The first thing you should do is figure out what you have left in your bank account at the end of every month.

Include:

Income after all taxes have been taken out

Work that comes from side jobs or self-employment

Rental income

Additional money you often get

📝 Example:

When you earn ₹35,000 salary and ₹5,000 side income, it equals ₹40,000 monthly income.

The next step is to follow your expenses.

For a month, make a note of every expense you have.

You can use a notebook, pick an app (Walnut, Money Manager, or Google Sheets), or obtain your bank statements online.

Look at where you spend your money by grouping it into categories.

Fixed: amount of rent, education instalments, school fees, and so on

1. Groceries, 2. Fuel, 3. Mobile phone recharge

Things bought under this category include meals at restaurants, goods bought at shops, and subscriptions.

This way, you discover how your funds are being dedicated.

✅ Step 3: Determine Limits That You Can Afford

Now, set a maximum budget for each thing you want to buy depending on your income.

You may start using the 50/30/20 rule as a guide.

Fifty percent of people’s income is used for their needs, such as food, rent, and bills.

30% Spendings are for entertainment and dining.

20% should go directly or indirectly into your savings and investments.

🔒 Example:

When you earn ₹40,000 as your monthly income, this result applies to you.

₹20,000 is an amount that someone would need to survive.

12,000 rupees is the amount I want.

The person is saving ₹8,000.

Make your choices depending on what you want to focus on.

After that, try to automate saving money.

Make sure you set aside your money before you spend it elsewhere.

Set up:

Make your credit card bills go directly to your saving account or SIP each month.

Try to hold an emergency fund with enough to cover expenses for 3 to 6 months.

Recurring deposits (RDs) or applications that rely on UPI

Saving just ₹2,000/month on a regular basis can build up as time passes.

✅ Keep an eye on your keywords and make changes each month.

Things in your budget may change from time to time. When things in life change, your budget needs to change too.

Every month:

Examine your budget to find out where you went either over or under your target.

Lower or raise the categories or set new ones.

Make note of little achievements (such as paying off your credit card or saving some money)

Review how you are spending money by organizing a budgeting day on the first of each month.

Useful extras to assist you in reaching your goals

Spendee and Money View are budget tracker applications.

Google Sheets allows you to edit and change documents without difficulties.

Just write a note of everything you buy during the day.

All in all, this article covers the main steps needed for data cleaning.

A well-created budget allows you to spend your money in a smart way. It guides your money into certain categories instead of letting you wonder how it was spent. It doesn’t have to be flawless, but as long as your budget stays basic and regular, it will boost your finances.

How to Create a Simple Monthly Budget That Actually Works