What Steps Should I Take to Simplify My Budget?
March 3, 2025 8:37 am
Question: What steps should I take to simplify my budget? I’ve never been very “money-minded,” and because I find budgeting difficult (and frankly NOT fun), I’ve never had a budget for longer than a few weeks. But looking back, I think my problem was always that my budget was just too complicated. What are your best tips for building a budget that’s super simple and easy to stick with for the long haul? Thank you!
Answer: First, know that you’re not alone in feeling this way. Millions of people feel that budgeting is a chore they’d rather avoid, or they may feel overwhelmed by the need to wrap their arms around their money. But the good news is that the simpler your budget, the more likely you are to stick with it — and simple budgets can actually be fun!
Step 1: Get a Clear Picture of Your Money
Before you dive into any budgeting method, you’ll want to take a step back and figure out where your money is going. This doesn’t need to be complicated — track your spending for a month or even just a week. You can use a notebook, spreadsheet, or app like YouNeedABudget (YNAB). The goal here isn’t perfection — it’s awareness. By knowing exactly how much money is coming in and going out, you can start to see patterns in your spending—both the good and the not-so-good.
Step 2: Choose Your Fighter
The key to long-term budgeting success is finding a method that fits your lifestyle. Three of the simplest budgeting methods are:
The 50/30/20 Budget
With this method, you break down your income like so:
- 50% goes to needs (rent, groceries, bills)
- 30% goes to wants (dining out, entertainment)
- 20% goes to savings and debt repayment
If your “needs” exceed 50% (because the cost of living is SUPER expensive these days), then adjust your “wants” category to cover the difference. Flexibility is the beauty of this system. You’re assigning broad categories, not tracking every single penny.
The Backwards Budget
This approach flips budgeting on its head:
- Start by saving for your goals through automatic transfers
- Pay your essential bills
- Spend what’s left on whatever you like — guilt-free
It’s ideal for those who want a hands-off approach while prioritizing savings.
The Zero-Sum Budget
Every dollar has a job in this method. You assign every penny of your income to a category (needs, savings, wants) until you reach zero. It’s precise, which can help if you need more structure. It can be time-consuming in its quest for precision, though.
Step 3: Keep It Flexible
Budgets aren’t meant to be set in stone. Life happens — unexpected expenses will pop up, and priorities will change. It’s up to you to adjust your categories as needed. For example, if you have a big expense one month, like car repairs, then you’ll want to reduce your spending in another category to make up for it. As Jean Chatzky, HerMoney’s CEO, tells participants of the FinanceFixx Money Makeover course, “A budget doesn’t have to mean creating a three-page spreadsheet and itemizing every single expense. It just means having a realistic picture of how much money is coming in, going out, and where it’s going.”
Don’t Forget To Track Your Progress (and Tweak as Needed)
After a month or two, review your budget. Are you meeting your savings goals? Are you overspending in certain categories? Use this information to make small adjustments. For example, if you notice you’re spending too much on eating out, challenge yourself to reduce that category by 20% the following month. Even a single month of tracking can be eye-opening — and empowering!
Remember that there is no such thing as the “perfect” budget that stays the same every single month. So, start with the basics and go from there. If you’re spending less than you earn and saving consistently, you’re already ahead of the game.
From our partnership with HerMoney/Filene
Want to learn more about budgeting? Here are a few resources:
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