How to Develop a Personal Budget for Yourself

Sticking to a budget will put you on track to serious savings.

Sticking to a budget will put you on track to serious savings.

Whether you’ve got your sights set on buying your first home, investing in a new car or maybe taking an extended getaway, developing a budget for yourself is the first step toward achieving your personal financial goals. Sticking to a budget may not come naturally, but with discipline and gradually changing your habits you will be able to finally start seeing a significant increase in your savings account. If you’re not ready to sacrifice those lattes during your morning commute, you can still include them in your budget – it just may take a little longer to reach your goals.


Plan to spend anywhere from two weeks to a month learning where and how you are spending your money. If you follow a steady routine, two weeks should be enough time, but if your days are more chaotic, take a month.

Record all of your daily expenses – even those afternoon trips to the office vending machine. It may seem tedious, but the mere act of writing down every time you part with your hard-earned money may be enough to reduce excess spending.

Itemize your expenses and add up a monthly total for each one. For example, the total of all your gas receipts will be a good average for what you spend a month on fueling your car. You may be surprised by some totals. These are your monthly expenses after bills and rent or mortgage.

Consider which expenses you can eliminate or reduce. Perhaps you can get that pedicure every two weeks instead of every Friday, or maybe you can cut back on caramel macchiatos to just two or three days a week, rather than every morning.


Calculate your recurring monthly expenses,such as your electric, cable, credit card, Internet and phone bills, as well as your car and insurance payments and your monthly housing rent or mortgage. If you pay some bills annually, such as your car insurance, just divide the figure down to a monthly cost.

Factor in how much you want to put into savings each month. Treat this amount like a monthly bill. Put it in savings and forget about it. If pinching pennies and staying in a budget feels like a foreign concept, start small and gradually increase the amount as you become more comfortable with tighter purse strings.

Subtract your total recurring monthly expenses from your monthly income after taxes. Divide the remaining amount by 4.33 -- which is the average number of weeks per month, although some are more and some are less -- to obtain a weekly figure for how much you should be spending on things like groceries, gas and going out.

Compare this amount to the amount you recorded during the preparation phase. Hopefully, you aren’t spending more than you actually have. If you are, review your expenses to see what you need to cut or reduce in order to get out of the red. Use the extra money to pay down those credit cards first and keep some put aside for fun stuff – this way you won't use your credit cards for concert tickets.

Establish goals based on the calculations you have made and, most important, stick to them. Track your weekly spending. It may take a few weeks but eventually that increase in your savings account will make up for all the brown bag lunches you are bringing to work, instead of frequenting that nearby bistro.


  • Ditch the pen and paper. Several mobile applications allow you to track spending and maintain financial goals from your Blackberry, iPhone, Android or other smart phone.

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About the Author

Based in South Florida, Leann Harms has been writing since 2008. Her design, technology, business and entertainment articles have appeared in "Design Trade" magazine and Web sites including eHow. Harms has a Bachelor of Arts in English from Florida Atlantic University.

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