How Do I Make A Budget And Stick To It?, by The Ramsey Show Highlights on YouTube. 4 min 25 s.
- Video length
- 4 min 25 s
- Time to do it
- 30 minutes
- Difficulty
- Easy
- Steps
- 7
What you need
Steps
Write down your take-home pay for the month. Use the amount that actually lands in your account, not your salary before tax, and add any side income you expect.
Open last month's bank and card statements and group the spending into categories: housing, food, transport, utilities, insurance, debt payments and fun.
Set an amount for the essentials first: rent or mortgage, groceries, utilities, transport, insurance and minimum debt payments. These get funded before anything else.
Add a line for irregular costs such as car repairs, gifts and school supplies, and a line for savings or an emergency fund.
Keep assigning money to categories until your income minus your outgoings equals zero. That zero is the whole point: nothing is left unplanned.
Check your spending once a week against the plan. When a category runs dry, move money from another category instead of adding new spending.
At month end, compare what you planned with what you actually spent, then adjust the numbers for next month.
Tips and common mistakes
Build the budget before the month begins, not halfway through it.
Use cash envelopes for the one or two categories where you always overspend.
Keep a small fun line in the budget so you can stick to it for more than a few weeks.
If your income changes, rebuild the budget each month from your lowest expected pay.
Questions
How long does a first budget take?
About 30 minutes if you have your statements handy. After the first month, updating it takes 10 to 15 minutes.
What if I have no money left over?
Start with the essentials and minimum debt payments. Trim the flexible categories like eating out and subscriptions until the plan balances.
Should I budget with my partner?
Yes, sit down together so you both agree on the amounts. One person spending from a plan the other has not seen is the usual reason budgets fail.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
