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How to create a budget (and why it doesn’t have to be painful)

A financial planner shares real-world tips for creating a budget that frees up your money for the things that are most important to you. Start now.

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For many of us, budgeting stirs up negative emotions and the admonishment that you shouldn’t spend money on the things you love. This is only one side of the budgeting story.

What if I told you your budget was the not-so-secret key to achieving your goals? Maintaining and sticking to a budget is the foundation of financial health, and many tools exist to help you become a budgeting rockstar.

Budgeting might be the most dreaded word in the English language, but it really shouldn’t be. Keep reading to find out why.

Why you need a budget

Fact: you need a budget.

A budget is merely a tool. Think of it as the GPS system for your goals, whether you want to save for the down payment on a home, fund a 529 plan for your kid’s college expenses, kick some debt to the curb, or save for an amazing vacation.

If the word budget makes your skin crawl, change the name. Call it a spending plan. Call it a balance sheet. Call it any name that is going to motivate you to stay on top of your monthly spending. Remember, it’s your budget, and you get to make the rules.

The bottomless pit

Without a budget, your money is sure to fall prey to the “bottomless pit syndrome.” You’ve undoubtedly experienced this. At the beginning of the month, you have every reason to believe you’ll be left with a certain amount left at the end of the month. Except then you don’t. And it happens month after month. This cycle can keep you borrowing from your savings or using your credit card to pay expenses.

The good news is you can break this cycle by setting up and following a budget.

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Key components of a budget

Creating your budget is easy. There are a few key components:

  • A list of your income for the month
  • A list of your fixed (must pay) expenses for the month. Think mortgage, rent, student loan, minimum credit card payments, groceries, car payment, life insurance, and so on.
  • A list of your variable (things you like to spend your money on) expenses for the month. Think subscriptions, gym membership, entertainment, shopping, eating out, transportation, travel, extra credit card payments, and other discretionary spending.

How to nail accuracy in your budget

A budget is only as good as the numbers you put in it, so think about following these steps to make your budget tell the truth each month.

Step 1: Create your budget at the beginning of the month with a column that includes the income and expenses you think you will have for the month. This can be accomplished by copying and pasting from the month prior, and adding in any extra payments you think you might want or need to make.

Step 2: Create a second column on your budget at the end of the end of the month that includes the income and expense that you really did have. This is the truth bomb for your budget. There are lots of tools that we’ll discuss below, but one of the easiest ways to do this is by looking at your current bank statement and totaling up how much you spent in each category. If needed, you can add categories that you forgot about.

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Tools to make budgeting easy and low-effort

There have never been so many great tools from mobile apps to software to downloadable templates to help you set up and manage your budget. Paper, pen, spreadsheets, and bullet journals are options, too. Try a couple of different strategies to see what works best for you and will keep you motivated to stay up-to-date with your budget.

Here are some tools to get your budget up and running:

You Need A Budget™

What: You Need A Budget offers software and a mobile app to help you get your budget and spending in shape. Its focus is on helping you give every dollar a job along with setting and achieving goals.

Who it’s for: This is an excellent tool for someone who is looking for a robust budgeting solution.

Cost: $6.99 a month after a free 34-day trial

Clarity Money©

What: Clarity Money is a mobile app that packs a lot of punch. Their motto is to help you take control of your finances by giving you a full financial picture, helping you find unwanted subscriptions and delivering other money saving knowledge in the palm of your hand.

Who it’s for: Clarity Money is great for budgeting newbies who want to feel empowered by keeping track of spending and saving in an easy-to-navigate mobile app.

Cost: Free


What: Albert is a newer budgeting app that uses the power of technology to help automate your finances and enables you to build a budget based on your actual income, spending habits, and goals.

Who it’s for: Albert tries to make saving money effortlessly, so it’s great for someone who wants to set up the app and then let it do the work. Albert also offers the Albert Genius (for a fee), a team of financial professionals you can text for all sorts of lingering money questions.

Cost: Free

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Budgeting for couples

Mastering the art of budgeting can be tricky as an individual, let alone as a couple. Money issues with couples are one of the top reasons for divorce year after year. As a couple, you bring to the relationship your own values and habits around money. Your money habits can cause conflict if you don’t set up some parameters to keep money in its place and have honest conversations.

Getting on the same financial page is the start of a great partnership. For each couple, this looks different, but there are a few key strategies you can incorporate each month to keep your finances going in the same direction.

Money rules – it’s a great idea to put a few money rules in place. The rules can serve as a foundation for how you make decisions as a couple for example, who is the primary person in charge of money decisions day-to-day, how much can you each spend without talking to each other, what will your bank and savings account structure look like, how much will you each invest from your paychecks, etc. Setting the foundation will take the mystery out of money decisions as a couple.

Money dates – a money date is just like it sounds, only better. Set aside fifteen to thirty minutes each week (preferably at the same time each week) to talk about what’s going on with your money. Make your money date enjoyable; have a glass of wine, go to your favorite park, make a nice dinner. During your money date, talk about what’s on your mind. What happened last week to your finances and what’s coming up in the next week. This is your time to reset and get focused on what’s happening behind the scenes with your finances. But please, have fun with these.

Set goals – setting goals is a crucial piece of success with couples. You can set money goals in your money dates, or set aside a separate time during the month to write these out. Include short term goals like paying off debt or covering financial risks and longer-term goals like saving to buy a house and retirement planning. Goals can and should be flexible, and always incorporated into your budget so you can achieve them.

Let your budget work for you

Setting and sticking to a budget is the best way to direct your finances powerfully, but a budget only works if you work at it. You won’t fall in love with the process of budgeting overnight, but if you commit to sticking with the process for a few months, you’ll be amazed at what you can achieve. Make budgeting work for you. Find the tools that inspire you and reward yourself along the way as you hit new goals.

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You Need A Budget is a trademark of You Need A Budget LLC.

Clarity Money is a copyright of Goldman Sachs Group Inc.

Albert is a copyright of Learn By Doing, Inc.

Shannah Compton Game is a CERTIFIED FINANCIAL PLANNER®  professional with an MBA and is the host of the award-winning podcast, Millennial Money, where she shares totally relatable and easy to understand financial advice that will actually make you want to talk about money.

Haven Life Insurance Agency doesn’t provide legal advice. This discussion is intended as general education only. We encourage you to work with your own personal tax or legal professionals. Opinions expressed by the author are their own and do not necessarily represent the views of Haven Life. Haven Life does not endorse the companies or offer the products, services and/or strategies discussed here.

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About Shannah Compton Game

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Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit:

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