4 Basic Steps to a Simple Budget

4 Basic Steps to a Simple Budget

how to create a simple budget www.whitneyodolo.com

Ever tried to get on a budget but failed to stick to it? Yep, I’ve been there!

The biggest reason that people don’t succeed with a budget can often be due to overcomplicating a simple task.

However, complicated budgets and consistency don’t really mesh together, do they?

I put together the 4 basic steps needed to create a simple budget for any income.

Disclaimer: I am not a personal finance expert. The information shared here should not be seen as professional advice. You should consult a financial professional before making any financial decisions.



Step 1: Know how much money is coming in for the month.

It is important to have a starting point. That starting point is simply put as, how much money comes in for the month?

Why is this so important?

Well, knowing how much money that comes in for the month clearly defines how much money you will be working with. Ask yourself, how many times has there been more month than money?

Take Action:

To complete this step, write down the overall monthly income that is paid out through the month.

Note: For those who get paid weekly, bi-weekly or twice a month, make sure that you write your monthly income down and list the amounts that you will see in any given week.


Step 2: Analyze spending habits and know where the money is going.

What is the money being spent on? Comb through receipts or debit transactions and have a look at where and what the money is being spent on. For some, a pattern will be easily spotted. For example, at one point we were spending over $600 on food – eating out. It is a good idea to know where money is being spent because it will allow for adjustments later.

Take Action:

To complete this step, gather receipts or debit transactions, put them in piles related to their category, add and write down the amounts by each pile.

If you recognize any patterns in spending, be sure to make note of that as well.

Example category piles: Food, Transportation, Entertainment, Misc Shopping, etc.


Step 3: Define expenses.

Expenses are anything that costs money. However, look at expenses as the bare necessities of what is needed. Shelter, food, utilities, transportation, household toiletries, and insurance. These are the basic necessities that you must have. All other items can be viewed as a perk.

Now, on to the perks. Perks are items that we can do without but we like to have. These can include cable, subscription boxes, memberships, additional fees or activity-related expenses, just to name a few.

These items include shelter, food, water, electricity, gas health insurance, car insurance, and many others. After the required expenses are down, go through and evaluate additional expenses on a case by case basis.

These expenses include subscriptions, cable, club memberships, and additional fees or activity related expenses. Decide which ones to keep and which ones that can be done away with. Check out this list of free weekend activities.

Take Action:

To complete this step, make a list and write down all the expenses that are required. Make another list of perks and write down the items that you would like to keep.

create a simple budget whitneyodolo.com

Step 4: Assign money.

The final step is to assign money from the money that comes into a specific item. For example, let’s say eating out for the month will require $150. Assign $150 for eating out and take $150 from the pay that is received this month. Do this process for each item that will need to be paid for this month.

Using a great system like this one can keep you from mindlessly spending.

Take Action:

To complete this step, tally up the amounts for the following categories: food, entertainment, misc, transportation.


When you put these vital steps to use, you will no longer feel stressed or confused about a budget. The money you save will slowly show in the bank and you’ll be able to stick to the simple budget.

Are you on a budget? What was your reasoning for getting on a budget?




  1. October 2, 2017 / 3:02 pm

    Hey Whitney! Beautiful site! Will follow you on Pinterest and social media so I can stay on top of your posts 🙂

    • Whitney
      October 2, 2017 / 3:24 pm

      Thanks so much Kimi!

  2. October 2, 2017 / 3:14 pm

    As a sahm I’m all too familiar with budgeting lol but I needed this refresher. Thanks for sharing these action steps.


    • Whitney
      October 2, 2017 / 3:26 pm

      Awesome Danielle! So happy you found them helpful!

  3. October 2, 2017 / 8:07 pm

    Love how simple & straightforward this is. Budgeting has become such a part of our life and actually feels more freeing than constraining to me! This explanation is awesome because it doesn’t make it sound more intimidating than it needs to be. Good job and beautiful site 🙂

    • Whitney
      October 2, 2017 / 10:15 pm

      Thanks, Brennan! It is really a freeing feeling when you take control of your finances and know where your money is going! I can relate to what you’re saying for sure. Also, glad you like the site!

  4. October 3, 2017 / 1:19 pm

    Outstanding and unstoppable post on how to budget and get started.

    • Whitney
      October 3, 2017 / 3:12 pm

      Thank you Rhonda!