Crafting a Personalized Budget

Make a budget you can stick to using your own spending habits.

Before starting to make a budget, we highly recommend to preliminary steps: 

1 – Figure out your net income – how much money you actually have coming in. 

If you are an employee of a company – or multiples companies – that should be pretty easy. Just look at your paycheck. The amount you receive after taxes and other deductions is your net income.

If you freelance or have a side gig, that’s a bit more complicated. But you can use how much you received after taxes for the last calendar year as a baseline for next year.

2 – Track your current spending to get the best picture of your current habits. More on how to do that here.  

We probably don’t need to tell you why budgeting is a good idea, but since it can be so difficult we’ll just say that when we’re doing it, we try to remember how important it is for our ultimate goal of long-term financial stability. Creating good habits is key for that and a budget is a like a road map to making that happen. 

This topic is so important we broke it into two videos. I recommend you watch the one above first, then the one below.

There are many ways to make a budget, but we like this style. 

We split our budget into three categories: Necessities / Unchangeable, Basic Discretionary and Luxury Discretionary 

We start with big costs, the ones that are unchangeable or hardest to change – like rent, car payments, debt payments and medicine. 

Then we have two discretionary or changeable categories – basic and luxury. It’s the difference between, say, a casual meal out and a fancy one or wine at hone and drinks at a bar. 

None are necessary to survive, to get to work, etc. but they vary heavily in price and how much joy they bring per dollar. 

Necessities / UnchangeableBasic DiscretionaryLuxury discretionary
RentCasual meals outFancy dinners
Car PaymentsEntertainment at homeConcerts, sporting events


Budgeting is usually done on a monthly basis, as that is how many bills are paid, but don’t forget to include annual and semi-annual costs like car maintenance, gynecologist visits, trips to see your family, etc.

You’ll also want to add a line with some amount for miscellaneous and emergences to the first two categories. Ideally by doing so, you won’t have to take money from your savings when these things happen.  

But how much to spend and save? 

There is no one answer. It’s about doing what works for you. 

We all have different personal strategies but one common idea is to save and allot to debt payments 20% of your net income. 

So if my after-tax income was $25,000, I’d try to set aside $5,000 for debt and savings. (We know it won’t be a pretty round number, but it makes the example easier to read!) 

$5,000 a year is $416 a month or $192 per pay period. (Most Americans get paid every two weeks, so there are actually 26 pay periods in a year, a little more than two a month.)

Breaking it down makes it seem a bit easier to digest. You may even want to break it down further – to $96 a week or $13 a day. 

Don’t forget! You’re including debt payments here, which you’ve already been paying. So depending on what yours are, you are losing less of your current spendable income than you might think. 

Extra money? 

If you don’t spend all that you’ve allotted for a month in the future, try to view that money as part of your savings and even move it to your savings account. 

Or use the 50/90 plan and put 90% of it in savings and 10% of it for some sort of fun spending. That puts it in line with bonuses and other unexpected gains. 

Money Funnies Budget Templates

Instructions included in template.

Microsoft Word

Google Sheets

Apple Numbers

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