Tips for 1st-Time Budgeters: Take Control of Your Money in 2023

Making a budget requires only four steps: list your monthly income, list your expenses, subtract the latter from the prior, and track your transactions. (BongkarnGraphic/Shutterstock)

So you’ve made a resolution to take control of your money this year—that’s amazing. A huge part of building new habits in any area of your life is just deciding you’re going to do it, so you’ve already gotten a big step out of the way. I know getting your finances in order can feel big and overwhelming, but we’re going to break it down in a way that’s simple and manageable. And one of the most important things you need as you get started on your financial journey in 2023 is ... drumroll, please ... a budget!

The word budget might kind of sound like a buzzkill if you’ve never done one before. If you’re on a budget, that means you can’t spend any money, right? Wrong! A budget actually gives you the freedom to spend because you’ve already decided ahead of time exactly how you’re going to use your money. Once you’ve set the boundaries, you give yourself permission to spend within those boundaries. And that means way less stress, guilt, and confusion around money. What a relief.

Here are a few tips for doing a budget for the first time (and actually sticking to it).

While families may occasionally need to make adjustments or sacrifices to hit their monthly financial goals, regular budgeting gives them permission to spend money in a way that's controlled and guilt-free. (wavebreakmedia/Shutterstock)

Make It Zero-Based

A zero-based budget is one in which your monthly take-home pay minus all your expenses equals zero. The point here is to give a job to every single dollar of your income. So if you make $2,500 a month, every dollar you save or spend should add up to $2,500.

You’ll want to make your budget for the month before the month begins so you have a plan for how you’ll spend your money from day one. This is how it works:

• List your monthly income. This includes your regular paychecks and any other money you plan to bring in throughout the month.
• List your expenses. Think of everything you spend money on during the month. Start with giving (10 percent of your income), savings, the Four Walls (food, utilities, shelter, and transportation) and other essentials such as insurance and child care. Then move on to other extras (such as entertainment and restaurants) and month-specific expenses (like birthdays and holidays).
• Subtract your total expenses from your total income. The amount remaining should be zero—if it’s not, that just means something in your budget needs a little adjusting. If you have extra money left over, put that money toward paying off debt or add it to another category in your budget. If you wind up with a negative number, find a way to cut back on some expenses or generate more income by selling stuff or taking on a side hustle until your balance equals zero.
• Track your transactions. Don’t just plan out your budget and then forget about it. As you spend money throughout the month, make sure you keep track of how much you’re spending and where so you don’t overspend in any category.

And that’s it! I promise, it really is simple once you get the hang of it.

Use a Budgeting App

Speaking of simple, one of the best ways to make this whole process even simpler for yourself is to use a budgeting app. Of course, you can also use an excel spreadsheet or go old school by mapping out your budget on paper. I say sign me up for the method that involves the least amount of math. I’m a huge fan of apps like EveryDollar that do most of the math for you and connect with your bank so you can easily track your transactions.

Give Yourself Grace, and Don’t Give Up

Budgeting for the first time is a big deal. Be proud of yourself and know that it usually takes people about three months to really get the hang of it and make everything run smoothly.

Once you start budgeting regularly, you’ll see where you and your family might need to make some adjustments or sacrifices in certain categories in order to hit your financial goals. But at the end of the day, you’ll feel like you got a raise—because now, you have permission to spend in a way that’s controlled, wise, and guilt-free. And that makes working toward those financial goals so much easier.

For more step-by-step guidance on making a budget that works for you, check out RamseySolutions.com/budgeting/how-to-make-a-budget. You’ve got this. Happy budgeting!