build a budget
Savvy Saver

Building a Budget in Three Easy Steps

By Jessica Price

June 12, 2023

Learning how to be disciplined with money is difficult especially if you’re new to mindful spending. With a little planning, however, effective budgeting can be achieved no matter how foreign the concept of saving vs. spending is for you. A budget helps you4 determine how much you’re spending and how much you would like to spend in order to reach your financial goals. Luckily, creating a budget in three easy steps is not only possible, but it can also be fun. Try to keep things as simple as possible1 when creating your budget, particularly if you’re new to the process. The easier it is to follow, the more likely you are to succeed. You may begin by simply tracking your spending before assessing it and building a budget. Any steps are good steps when working towards financial health for yourself and your family.

Step One: Assess Your Current Spending

Sticking to a budget starts with assessing your current spending. You can’t get where you want to go if you have no idea where you currently stand. We suggest using two to three months’ worth of transactions to get a good idea of your average spending. Separate each transaction into categories to see how much you're spending on fixed expenses that you cannot change or avoid and flexible expenses that could be cut or bulked up depending on your financial situation. Flexible expenses vary month to month and sometimes can be omitted altogether whereas fixed expenses are generally expected to stay the same, or close to the same, month after month. Use the following categories and examples of expenses as you create your assessment.

Budget Category Ideas

  • Housing
  • Insurance and Medical
  • Transportation
  • Food
  • Basic Necessities
  • Miscellaneous or Extra Spending
  • Debt

Examples of Fixed Expenses

  • Rent or Mortgage
  • Renter’s or Homeowner’s Insurance
  • Health/Life Insurance Premiums
  • Prescriptions
  • Car Payment
  • Car Insurance
  • Child Care/Child Support
  • Tuition/Fees
  • Loan Payment
  • Cell Phone
  • Internet & Cable/Subscriptions (some of this may fall under flexible expenses)
  • Utilities (like electric, gas and water)

Examples of Flexible Expenses

  • Groceries
  • Restaurants/Meals Out
  • Bank or Credit Card Fees
  • Savings
  • Gas or EV Charging for Vehicle
  • Public Transportation/Taxis
  • School Supplies/Costs
  • Health/Hygiene Products
  • Entertainment
  • Clothing/Shoes
  • Laundry

Once you’ve categorized your current spending habits, you’ll know whether or not you’re living within your means. During this research phase, make sure to write down the amount you bring in monthly (all income sources should be accounted for if they are monthly, and you count on them for your bill payments). You’ll want to create your budget to fit your pay periods. You can budget by paycheck date meaning that you will allot certain amounts of money to different bills and expenses depending on the date in the month and how much you expect your paycheck to be on payday. What does this look like? Let’s say you make $3,000 per month after taxes and your rent or mortgage payment is $1000. You are paid twice a month which means you make $1500 per paycheck. An option for budgeting by paycheck and keeping more funds available to you throughout the month for additional bills, food, and fun is to take $500 per paycheck out for rent.

Step Two: Write Out Your Budget Plan

Creating a budget that works starts with your assessment, and that review process is vital. You need to know where you spend the most, what you value the most, and where you have room for improvement. Simply keeping track of your expenses and paying attention to how much is being spent in different areas of your life can be revolutionary and create massive progress quickly. Once you’re ready to take your budgeting skills from budget basics to advanced budgeting, however, it’s time to create a budget plan. Effective budgeting can be accomplished in many ways, but a popular route to take is the 50/30/20 budget plan3 which allots 50% of your spending to needs, 30% to things you want but that are not vital to your existence (hello Target runs), and 20% of your funds are spent on debt repayment and savings. You can simply enter your income into this budget calculator2 courtesy of Nerd Wallet which populates the appropriate amount for each category for you. Use this as a guideline as you divvy up your earnings and create your first budget.

Step Three: Create a Tracking Habit

You can use a spreadsheet and manually enter each transaction as you go through the month, or you can utilize the budgeting app of your choice. Some people even opt for cash and an envelope system although that has become increasingly harder to manage as many vendors no longer accept cash. The way you choose to track your spending is a personal choice, but make sure to choose something that is not only doable but something you can maintain long term. For me, tracking daily is the only way to go. Otherwise, I wind up with dozens of transactions, overspending in some categories, and a loss of will when it comes to sitting down to assess the budget. If you’d like to keep things super simple, a plain sheet of paper works. Write down your categories and the amount you have to spend on each category. Then divvy up the funds into needs, wants, and savings/debt. Create a plan for your spending and stick to it. Before heading to the store, glance at the budget and see how much you have left in that category to spend. You can track spending using your receipts or by looking at your bank account regularly. Many budgeting apps link to your account and help you automate this process, but there’s nothing quite like manually writing down how much you’ve spent to shock you into a budget mindset right from the beginning.

Sticking to a budget is important but not always easy. Money discipline is a habit that is formed with practice, patience, and a goal or two in mind. Being debt free might be your ultimate goal, or perhaps you’d like to travel more. Even the smallest budgeting changes5 like skipping the line at your favorite coffee shop and investing in a great coffee machine at home which will save you over time can add up to significant savings. No matter your motivation, creating money habits that you can be proud of and pass down to future generations is something you deserve. Get rolling by cracking open the bank account and taking a look. No matter how nervous that idea makes you, I can promise you that facing the situation head on and taking back your control will be incredibly empowering and ultimately worth it. As you work through your financial journey, CheckSmart is here to help you when times get tough. If you need an extra hand and payday is a little too far away, our Loan Experts can connect you with your SmartMatch loan to help you through. We’re here to help!


1Srinivasan, Hiranmayi (2022, Nov 23). 4 Tips for First Time Budgeting Retrieved from:

2NerdWallet (2022, Dec 21). Monthly 50/30/20 Budget Calculator Retrieved from:

3Bev O’Shea and Lauren Schwahn (2022, Dec 2). Budgeting 101: How to Budget Money Retrieved from: Making a Budget Retrieved from:

5Goldberg, Matthew (2022, Sept 27). 12 ways to save money on a tight budget Retrieved from:

Jessica is hyper-focused on making information about the Personal Loans offered by CheckSmart including Payday Loans, Installment Loans, and Title Loans accessible and easy to understand. Learning the basics about finances shouldn’t be complicated after all! The key to responsible borrowing is understanding the loans you’re considering, and it’s Jessica’s mission to help anyone considering a loan make an informed decision. Jessica is passionate about sharing easy-to-follow Budgeting Tips and helping readers increase their financial literacy in the Financial Corner of the blog. You’ll find great budgeting tips, Simplified Savings tips, and information that will help you improve your financial wellness sprinkled throughout each of her blogs.

Related Articles

gift giving on a budget

Savvy Saver

Budget Friendly Gift Ideas for the Holidays

December 8, 2023

holiday budgeting

Savvy Saver

Holiday Budget Planning Can Prevent Post Holiday Blues

November 30, 2023

prioritizing finances

Savvy Saver

Juggling Financial Goals and Your Lifestyle

November 30, 2023

Customer Notice: There are a wide variety of financial products available in the marketplace, so your choice should match your financial needs. Small-dollar loans used over a long period of time can be expensive. 

Noticia al Consumidor: Existe una amplia variedad de productos financieros disponibles en el mercado, por lo que su elección debe coincidir con sus necesidades financieras. Los préstamos de poco dinero utilizados durante un largo período de tiempo pueden ser costosos. 

Green Dot: must be 18 or older to open an account. Online access, mobile number verification (via text message) and identity verification (including SSN) are required to open and use your account.  Mobile number verification, email address verification and mobile app are required to access all features.

1. Early direct deposit availability depends on payor type, timing, payment instructions, and bank fraud prevention measures. As such, early direct deposit availability may vary from pay period to pay period. The name and Social Security number on file with your employer or benefits provider must match your Green Dot account to prevent fraud restrictions on the account.

2. Opt-in required. Account must be in good standing and chip-enabled debit card activated to opt-in. Initial and ongoing eligible direct deposits are required for overdraft coverage. Additional criteria may apply which can affect your eligibility and your overdraft coverage. Overdrafts are paid at our discretion. Overdraft fees may cause your account to be overdrawn by an amount that is greater than your overdraft coverage. A $15 fee may apply to each eligible purchase transaction that brings your account negative. Balance must be brought to at least $0 within 24 hours of authorization of the first transaction that overdraws your account to avoid a fee.

3. See app for free ATM locations. 1 free in-network withdrawal per calendar month. $3.00 per withdrawal thereafter. $3.00 for out-of-network withdrawals and $1.00 for balance inquiries, plus any fee the ATM owner may charge. Limits apply.

Green Dot® cards are issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A., Inc. Visa is a registered trademark of Visa International Service Association. And by Mastercard International Inc. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.  Green Dot Bank also operates under the following registered trade names: GO2bank, GoBank and Bonneville Bank. All of these registered trade names are used by, and refer to, a single FDIC-insured bank, Green Dot Bank. Deposits under any of these trade names are deposits with Green Dot Bank and are aggregated for deposit insurance coverage up to the allowable limits.  ©2023 Green Dot Bank. All rights reserved. Green Dot Corporation NMLS #914924; Green Dot Bank NMLS #908739

The USA PATRIOT Act is a Federal law that requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. You will be asked to provide your name, address, date of birth, and other information that will allow us to identify you. You may also be asked to provide documentation as proof of identification. Approval is contingent upon successfully passing this mandatory identification confirmation.

Loan Products: Subject to state regulations, eligibility, credit check, underwriting & approval, and meet state database eligibility, where required based on type of lending product requested. All products are not available at all locations. Rates, terms and conditions apply. See associate for details. Lending decisions and funding times subject to system limitations. Some applications may require additional verification, which can delay the lending decision. 

Non-Loan Store Services: Rules, restrictions, and fees apply. See store for details. 

Ohio Residents: Check Cashing provided by Buckeye Check Cashing, Inc., CC700000, Main Office 5165 Emerald Parkway, Suite 100, Dublin OH 43017. 

© 2024 CheckSmart Financial Company. All Rights Reserved. Privacy Policy | Terms of Use | Accessibility Statement