How to make a monthly budget: a step-by-step guide
In short: A monthly budget is what you write down before a period starts: the income you expect and the money you can spend. List your income and fixed costs, and divide what is left by the days ahead to see what you can spend each day.
Why a budget works
Money rarely runs out in one big purchase. It goes in small spends, one day at a time. A budget makes those spends visible: you know in advance what things cost and the end of the month holds no surprise.
A good budget does not have to be complicated. It answers three questions: how much do I earn, what must I pay, and what is left?
A monthly budget, step by step
- Pick your period. If your salary arrives on the 25th, start the period on the 25th; it does not have to be the calendar month.
- Write down your income. Add the regular amounts (salary, rent you receive) that are certain for the period and leave out the uncertain ones.
- Set fixed costs aside. Add up what comes every period at the same amount: rent, bills, subscriptions, loans and instalments.
- Work out what is left. Subtract the fixed costs from your income; the rest is what you can give to flexible spending and savings.
- Give flexible categories a limit. Groceries, transport and eating out each get their own ceiling.
- Find your daily amount. Divide what is left by the days remaining in the period: that is what you can spend today without worry.
- Look back at the end. Which categories went over and which had room? Adjust the next period's limits.
How Yetir makes it easier
In Yetir you set a ceiling for the period and the app shows what you can spend each day. Categories can have their own limits, so when you add a spend you see where you stand.
Records can be added from templates in one tap, tagged and split into instalments. Recurring items such as salary, rent and subscriptions are handled on their due dates, so you do not retype your fixed costs every month.
Yetir runs on your phone, your Mac and in the browser. Sign in with an account and your data stays in step across them.
Frequently asked questions
What share of my income should the budget set aside?
There is no single ratio that fits everyone. Write your fixed costs first, then divide what is left between flexible spending and savings. Pick a split that suits you and adjust it after a few periods.
Does a budget period have to be the calendar month?
No. Starting the period on the day your salary arrives is usually more accurate, because your income and costs fall in the same period.
Is Yetir free?
The budget, records, accounts, goals and debt tracking are free. On your phone you can use it without an account.
Try it with Yetir
On your phone, your Mac or in the browser: follow your spending, accounts and savings in one place.
The web version needs a free account (e-mail, Google or Apple); your data stays in step with your phone.