Money and taxes · Easy · about 1 hour to set up, then 10 minutes a week

Make a Simple Budget

A budget is a plan for your money: what comes in, what goes out, and what you save. It helps you notice when spending creeps up and makes room for goals and surprises.

When to teach it: Watch from about 8, help from about 10, do it alone from about 13.

You'll need

Your take-home (net) pay and any other income
Receipts, a bank statement, or a banking app showing a month of spending
A notebook, spreadsheet, or the CFPB monthly budget worksheet
A calculator
A calendar for bill due dates

Step by step

Tick each step as you go if you like; ticks stay on this device.

List your incomeWrite down every source of money you get in a month. Use take-home pay, not gross pay, and include second jobs, allowances, or benefits.
Track your spendingWrite down everything you spend, even small things. Receipts and your bank account make this easier. If a whole month feels like too much, start with one week.
Sort it into categoriesGroup your spending into categories like housing, utilities, groceries, transportation, phone, and eating out.
Mark needs and wantsA need is something whose absence would put your health, safety, or ability to earn a living at risk. Most other things are wants. People's lists differ, and that's okay.
Spot fixed, flexible, and occasional costsFixed costs stay about the same, like rent or a phone plan. Flexible costs change, like groceries and entertainment. Occasional costs, like clothes or repairs, don't come every month.
Mark bill due datesPut each bill's due date on a calendar. If paydays and due dates don't line up, you can come up short even when the monthly totals look fine.
Choose a savings amountDecide how much to set aside for an emergency fund and your goals. Even a small amount helps. An automatic transfer from checking to savings makes it easier.
Add it upSubtract total spending and savings from total income. If the answer is positive, you have money left to save or spend. If it's negative, look at flexible spending first for cuts.
Check and adjustEach week or month, compare your plan with what you really spent. Update the budget when your job or spending habits change.

Math

How it works: Percentages show where your money goes

A budget is mostly addition and subtraction: total income minus total spending tells you what's left. Percentages let you compare categories, even when your income changes from month to month.

To find what percent of your income goes to a category, divide the category total by your income and multiply by 100.

Worked example with made-up round numbers: take-home pay is $2,000 a month. Needs are rent $900, groceries $300, transportation $150, utilities $100, and phone $50, for a total of $1,500. Savings is $200. Wants are $300. Check: $1,500 + $200 + $300 = $2,000.

Needs are $1,500 ÷ $2,000 × 100 = 75%. Savings is $200 ÷ $2,000 × 100 = 10%. Wants are $300 ÷ $2,000 × 100 = 15%. The three percentages add up to 100%, which is a good way to check your work.

percent of income = (category total ÷ total income) × 100

Try it: For two weeks, track every bit of allowance or gift money: what came in and what went out. Sort it into needs, wants, and savings, then find each group's percent of the total.

Keep learning: Ray's Arithmetic

Teaching it to your kids

Give a small, regular allowance and let your child plan how to split it between spending and saving.
Play a needs-or-wants sorting game with an old grocery receipt.
Put a few real household bill due dates on a family calendar and talk about why timing matters.
Track progress toward a savings goal on a chart and celebrate milestones along the way.

Tips

Budget with net pay, not gross pay.
Plan for occasional costs, like birthdays, clothes, or car repairs, by setting aside a little each month.
Save windfalls, such as gifts or tax refunds, toward your emergency fund.
Keep your emergency fund somewhere safe and easy to reach, but not too tempting, such as a separate savings account.
Budgets are never perfect. The point is to notice when something costs more than you expected.

Common mistakes

Mistake	Instead
Forgetting small purchases	Keep a daily log for a while. Small buys add up fast.
Leaving out bills that don't come every month	List yearly and occasional costs, divide each by 12, and set that amount aside every month.
Giving up after one bad month	Revise the plan using what you actually spent, and try again next month.
No line for savings	Treat savings like a bill. Set up an automatic transfer on payday if you can.

Where to get help

If debt is piling up, a reputable nonprofit credit counseling program may help. The FTC notes these may be offered through credit unions, universities, military personal financial managers, and Cooperative Extension offices.

Sources

Free how-to guides for families, with nothing to earn, pass or send in. They follow U.S. rules and sources; your owner's manual, product labels and state and local rules come first. This guide explains how things work; it isn't personal financial, tax or legal advice.

📊 Make a Simple Budget

Name ____________________ Date __________

You'll need

Your take-home (net) pay and any other income
Receipts, a bank statement, or a banking app showing a month of spending
A notebook, spreadsheet, or the CFPB monthly budget worksheet
A calculator
A calendar for bill due dates

Steps

List your income. Write down every source of money you get in a month. Use take-home pay, not gross pay, and include second jobs, allowances, or benefits.
Track your spending. Write down everything you spend, even small things. Receipts and your bank account make this easier. If a whole month feels like too much, start with one week.
Sort it into categories. Group your spending into categories like housing, utilities, groceries, transportation, phone, and eating out.
Mark needs and wants. A need is something whose absence would put your health, safety, or ability to earn a living at risk. Most other things are wants. People's lists differ, and that's okay.
Spot fixed, flexible, and occasional costs. Fixed costs stay about the same, like rent or a phone plan. Flexible costs change, like groceries and entertainment. Occasional costs, like clothes or repairs, don't come every month.
Mark bill due dates. Put each bill's due date on a calendar. If paydays and due dates don't line up, you can come up short even when the monthly totals look fine.
Choose a savings amount. Decide how much to set aside for an emergency fund and your goals. Even a small amount helps. An automatic transfer from checking to savings makes it easier.
Add it up. Subtract total spending and savings from total income. If the answer is positive, you have money left to save or spend. If it's negative, look at flexible spending first for cuts.
Check and adjust. Each week or month, compare your plan with what you really spent. Update the budget when your job or spending habits change.

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