The Basics of Budgeting: A Step-by-Step Guide to Creating and Sticking to a Budget

When I first started learning about personal finance, the idea of budgeting felt intimidating. How could I balance everything—school supplies, outings with friends, saving for college—with the little money I had from allowance or part-time jobs? It turns out, budgeting isn’t about restriction; it’s about understanding your money and making it work for you.

If you’re a student like me, here’s a step-by-step guide to help you build a simple budget and stick to it.

Step 1: Know Your Income

The first step is understanding how much money you have coming in.

For high school students, this might include:

Allowance
Part-time job income
Gifts or pocket money from family

Write down all your sources of income and the average amount you receive each month.

Step 2: Track Your Spending

You can’t create a budget if you don’t know where your money is going. For one month, track everything you spend, even the small stuff like snacks or subscriptions.

You can use:

A notebook
A simple spreadsheet
Budgeting apps like Mint or YNAB (You Need a Budget)

This step helps you see your spending habits clearly.

Step 3: Separate Needs from Wants

Once you’ve tracked your spending, categorize it into needs and wants:

Needs: Essential expenses like school supplies, transportation, and lunch money.
Wants: Non-essentials like takeout, streaming services, or new clothes.

This doesn’t mean you can’t spend on wants; it just helps you prioritize.

Step 4: Set Financial Goals

What do you want to do with your money? Having clear goals can motivate you to stick to your budget.

For example:

Save for a new laptop or phone.
Build a college savings fund.
Put aside money for a special trip or experience.

Write down your goals and how much you need to save for each.

Step 5: Create Your Budget

Now it’s time to plan. Use the 50/30/20 rule as a guide:

50% for needs.
30% for wants.
20% for savings.

Here’s how it might look:

Monthly income: £100
- Needs: £50
- Wants: £30
- Savings: £20

Adjust the percentages to fit your situation, especially if your income is small.

Step 6: Use Tools to Stay on Track

Sticking to a budget is easier with the right tools. You can:

Use free apps like Goodbudget or PocketGuard.
Set reminders on your phone to review your spending weekly.
Put your savings into a separate account so you’re not tempted to spend it.

Step 7: Review and Adjust

Your budget isn’t set in stone. Review it every month to see what’s working and what’s not. Did you overspend on wants? Did you save more than expected? Adjust as needed to stay on track with your goals.

Why Budgeting Matters

Budgeting isn’t just about managing your money—it’s about building habits that set you up for success. Learning to budget in high school has helped me feel more in control and prepared for the future.

Remember, it’s okay to make mistakes along the way. What matters is that you keep learning and improving. You’ve got this!

Do you have any budgeting tips that work for you? Share them in the comments below!

Here’s to smart money moves,
Tobey