Here’s how to create a budget for yourself

April 14, 2023

Making and sticking to a budget can help keep you on track for reaching your short- and long-term financial goals. But if you haven’t done it before it can feel a bit overwhelming. The good news is that it isn’t hard to get started. And you can (and should) make adjustments along the way.

Establishing a monthly budget is a basic financial practice that can help you meet your monthly commitments as well as put you in good shape to save money. You can get started in just a few easy steps.

1. Identify income and expenses

Start by listing your net monthly income — be sure to include all sources of income — and your known monthly expenses. Your expenses should include:

Payments that you make on a monthly basis, such as rent or mortgage, utilities and your car payment.
The average monthly cost of expenses that you pay quarterly, semiannually or annually, such as car insurance, property taxes and some utilities.
The average cost of purchases you make each month for items like entertainment, dining out, dry cleaning, groceries, parking and gifts.
Don’t forget “little” things that when added together may be a big cost, like that daily latte or buying lunch out.
Estimate a monthly amount to set aside for unforeseen expenses like car repair or an emergency vet visit for your dog.
Last, but not least, add in an amount for short-term and long-term savings. Saving is easiest when it’s a built-in part of your monthly budget.

2. Add it up

Add up your income and expenses. You’ll come up with one of three results:

Your income exceeds your expenses. Great! Now you can look at using some of that “extra” cash to pay off credit card debt or to add money toward your short- and long-term savings goals.
Your income and expenses are equal. This is good. But just to protect against the unexpected, or to meet other financial goals, consider cutting back on some of the “little” expenses. It can be as simple as packing your own lunch instead of dining out or taking the bus instead of driving. Doing so can provide a nice cushion when you need it.
Your expenses exceed your income. This is a situation that you’ll want to look at carefully and take steps to correct. Below are tips on how to cut costs.

3. Make adjustments

Take a look at your budget and identify things you can eliminate or reduce from your expenses. Many options are likely to come from your list of “little” things. If you’re not seeing much there, try recording everything you buy over a period of a week or two. A month is even better. You may be surprised by how easy it is to buy “little” things that really add up. For example, a $5 latte every workday can add up to $100 a month and $1,200 a year!

There are lots of ways to cut back on expenses, here are just a few ideas:

Get savvy with your grocery shopping. Use coupons, digital deals, and smart buying habits to save big bucks.
Update subscriptions. Got a streaming service or gym membership that you don’t use anymore? Cancel them.
Lower your energy use. Switch to LED lights, lower the temperature on your water heater by a degree or two, and invest in a programmable thermostat.

Once you have your budget defined and any adjustments made, it’s a good idea to review it periodically, perhaps monthly, so you can make additional updates as your financial situation changes.

Inspired to save? Here are nine simple strategies for saving on daily expenses. Or if you’re ready to put your extra money to good use, get started with a savings account.

Learn about U.S. Bank

Visit usbank.com

800-872-2657

What financial advice would you give your younger self?

How much life insurance do I need?

Dear Money Mentor: How do I pick a savings or checking account?

10 ways to increase your home’s curb appeal

Car shopping: Buying versus leasing your next vehicle

What you should know about buying a car

Credit: Do you understand it?

Is it the right time to refinance your mortgage?

6 questions to ask before buying a new home

Should you buy a house that’s still under construction?

5 things to avoid that can devalue your home

What is a home equity line of credit (HELOC) and what can it be used for?

9 simple ways to save

3 awkward situations Zelle can help avoid

Is raising backyard chickens a good idea financially?

Here’s how to create a budget for yourself

Money Moments: How to manage your finances after a divorce

Helpful tips for safe and smart charitable giving

Money Moments: 8 dos and don’ts for saving money in your 30s

Tips to raise financially healthy kids at every age

Travel for less: Smart (not cheap) ways to spend less on your next trip

Understanding guardianship and power of attorney in banking

Should you buy now, pay later?

What’s in your emergency fund?

What you need to know about renting

From LLC to S-corp: Choosing a small business entity

6 things to know about long-term care insurance cost and benefits

Is your employer long term disability insurance enough?

Do I need a financial advisor?

6 tips for trust fund distribution to beneficiaries

Preparing for retirement: 8 steps to take

How to build wealth at any age

How to manage your money: 7 tips to improve your finances

LGBTQ+ financial planning tips

Investment strategies by age

Should I itemize my taxes?

Your 5-step guide to financial planning

What is Medicare? Understanding your coverage options

8 steps to take before you buy a home

Military homeownership: Your guide to resources, financing and more

Are professional movers worth the cost?

What to know when buying a home with your significant other

Building a dream home that fits your life

Mortgage basics: How much house can you afford?

Mortgage basics: Finding the right home loan for you

Home buying myths: Realities of owning a home

Certificates of deposit: How they work to grow your money

5 financial goals for the new year

Retirement savings by age

Annual insurance policy review checklist

Allowance basics for parents and kids

Loud budgeting explained: Amplify your money talk

How I did it: Turned my side hustle into a full-time job

Retirement plan options for the self-employed

Checking and savings smarts: Make your accounts work harder for you

5 reasons why couples may have separate bank accounts

Common unexpected expenses and three ways to pay for them

It's possible: 7 tips for breaking the spending cycle

Myths vs. facts about savings account interest rates

Closing on a house checklist for buyers

How to plan and save for adoption and in vitro fertility treatment costs

Multiple accounts can make it easier to follow a monthly budget

Is it time to get a shared bank account with your partner?

Don’t underestimate the importance of balancing your checking account

7 steps to keep your personal and business finances separate

How to Adult: 5 ways to track your spending

Which is better: Combining bank accounts before marriage — or after?

5 tips for parents opening a bank account for kids

6 questions students should ask about checking accounts

30-day adulting challenge: Financial wellness tasks to complete in a month

Estate planning checklist: 8 steps to secure your legacy

8 steps to choosing a health insurance plan

Key milestone ages as you near and start retirement

How to build a financial plan that covers your savings and expenses

A who’s who at your local bank

How I did it: Bought a home without a 20 percent down payment

How I did it: Switched career paths by taking an unexpected pivot

5 ways to maximize your garage sale profits 

Estate planning documents: Living trusts vs. will vs. living will

Why estate planning is important

How a Health Savings Account (HSA) can benefit your retirement plan

Year-end financial checklist

Housing market trends and relocation impact

Finance or operating lease? Deciphering the legalese of equipment finance

Buying or leasing? Questions to ask before signing a contract

Insource or outsource? 10 considerations

The secret to successful service provider integration

How to improve your business network security

Safeguarding the payment experience through contactless

COVID-19 safety recommendations: Are you ready to reopen?

Unexpected cost savings may be hiding in your payment strategy

Protecting cash balances with sweep vehicles

Changes in credit reporting and what it means for homebuyers

High-cost housing and down payment options in relocation

What corporate treasurers need to know about Virtual Account Management

Crypto + Relo: Mobility industry impacts

For today's relocating home buyers, time and money are everything

How to sell your business without emotions getting in the way

5 steps to take before transitioning your business

10 tips on how to run a successful family business

Talent acquisition 101: Building a small business dream team

Costs to consider when starting a business

How to test new business ideas

The costs of hiring a new employee

How to expand your business: Does a new location make sense?

Meet your business credit card support team

How to choose the right business checking account

Does your side business need a separate bank account?

Break free from cash flow management constraints

How to build a content team

Multigenerational household financial planning strategies

How to track expenses

How to manage your finances when you're self-employed

Good debt vs. bad debt: Know the difference

Good money habits: 6 common money mistakes to avoid

Reviewing your beneficiaries: A 5-step guide

How to talk about money with your family

Financial steps to take after the death of a spouse

Retirement advice: How to retire happy

Retirement income planning: 4 steps to take

Preparing for retirement: 8 steps to take

Comparing term vs. permanent life insurance

Transitioning from the military to the civilian workforce

Working after retirement: Factors to consider

4 steps to finding a charity to support

Year end tax planning tips

What types of agency accounts are available for investors?

Tips for navigating a medical hardship when you’re unable to work

11 essential things to do before baby comes

Webinar: Uncover the cost: Starting a family

Preparing for adoption and IVF

Checklist: 10 questions to ask your home inspector

Resources for managing financial matters after an unexpected death

What you need to know as the executor of an estate

What documents do you need after a loved one dies?

Checklist: financial recovery after a natural disaster

How does money influence your planning?

College budgeting: When to save and splurge

How to save money in college: easy ways to spend less

How to gain financial independence from your parents

The A to Z’s of college loan terms

Co-signing 101: Applying for a loan with co-borrower

Practical money skills and financial tips for college students

How to build credit as a student

5 things to know before accepting a first job offer

How I did it: Paid off student loans

Bank Notes: College cost comparison

Tips to earn that A+ in back-to-school savings

Recognize. React. Report. Don't fall victim to financial exploitation

Recognize. React. Report. Caregivers can help protect against financial exploitation

Webinar: U.S. Bank asks: Are you safe from fraud?

Is online banking safe?

How you can prevent identity theft

8 tips and tricks for creating and remembering your PIN

What to do with your tax refund or bonus

Pros and cons of a personal line credit

3 tips for saving money when moving to a new home

3 ways to keep costs down at the grocery store (and make meal planning fun)

5 tips for creating (and sticking to) a holiday budget

Financial checklist: Preparing for military deployment

Planning self-care moments that matter (and how to finance them)

5 things to consider when deciding to take an unplanned trip

Stay committed to your goals by creating positive habits

Growing your savings by going on a ‘money hunt’

Working with an accountability partner can help you reach your goals

Why a mobile banking app is a ‘must have’ for your next vacation

How to decide when to shop local and when to shop online

Does your savings plan match your lifestyle?

Uncover the cost: Wedding

Uncover the cost: International trip

Are savings bonds still a thing?

Tips to overcome three common savings hurdles

Adulting 101: How to make a budget plan

Personal loans first-timer's guide: 7 questions to ask

Mindset Matters: How to practice mindful spending

How can I help my student manage money?

How to manage money in the military: A veteran weighs in

You can take these 18 budgeting tips straight to the bank

Save time and money with automatic bill pay

How to best handle unexpected expenses

Stay on budget — and on the go — with a mobile banking app

Do you and your fiancé have compatible financial goals?

U.S. Bank asks: Transitioning out of college life? What’s next?

U.S. Bank asks: Do you know your finances?

U.S. Bank asks: Do you know what an overdraft is?

Personal finance for teens can empower your child

How to save for a wedding

How compound interest works

Dear Money Mentor: How do I set and track financial goals?

Lost job finance tips: What to do when you lose your job

Money Moments: 3 smart financial strategies when caring for aging parents

Money management guide to financial independence

First-timer’s guide to savings account alternatives

7 financial questions to consider when changing jobs

Essential financial resources and protections for military families

How to stop living paycheck to paycheck post-pay increase

Practical money tips we've learned from our dads

How to increase your savings

Bank from home with these digital features

How grandparents can contribute to college funds instead of buying gifts

How to open and invest in a 529 plan

Using 529 plans for K-12 tuition

Parent checklist: Preparing for college

What to consider before taking out a student loan

Consolidating debts: Pros and cons to keep in mind

How to talk to your lender about debt

How to use debt to build wealth

Know your debt-to-income ratio

Overcoming high interest rates: Getting your homeownership goals back on track

For today's homebuyers, time and money are everything

Crypto + Homebuying: Impacts on the real estate market

How I did it: Bought my dream home using equity

Buying a home Q&A: What made three homeowners fall in love with their new home

House Hacks: How buying an investment property worked as my first home

Managing the impacts of appraisal gaps in a hot housing market

How I did it: Built living spaces to support my family

Spring cleaning checklist for your home: 5 budget-boosting tasks

Saving for a down payment: Where should I keep my money?

Your guide to breaking the rental cycle

Checklist: 6 to-dos for after a move

What are conforming loan limits and why are they increasing

Uncover the cost: Building a home

The lowdown on 6 myths about buying a home

4 ways to free up your budget (and your life) with a smaller home

Get more home for your money with these tips

Money Moments: Tips for selling your home

Money Moments: How to finance a home addition

How I did it: My house remodel

Dear Money Mentor: When should I refinance a mortgage?

Beyond the mortgage: Other costs for homeowners

10 questions to ask when hiring a contractor

What is an escrow account? Do I have one?

These small home improvement projects offer big returns on investment

Should you get a home equity loan or a home equity line of credit?

Is a home equity line of credit (HELOC) right for you?

How to use your home equity to finance home improvements

How do I prequalify for a mortgage?

Home equity: Small ways to improve the value of your home

Can you take advantage of the dead equity in your home?

10 uses for a home equity loan

Improving your credit score: Truth and myths revealed

U.S. Bank asks: What do you know about credit?

Take the stress out of buying your teen a car

Questions to ask before buying a car

Equal Housing Lender

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.