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10 Steps to Set Up and Stick to a Monthly Budget

10 Steps to Set Up and Stick to a Monthly Budget

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Budgeting is an essential skill that everyone should know how to do. It helps you prioritize your expenses, save money for future goals, prevent overspending and clarify your financial situation.

Setting up a monthly budget might seem daunting initially, but once you get the hang of it, it becomes second nature. Here's a step-by-step guide to help you set up a successful monthly budget:

1. Understand the Purpose

Many people think of budgeting as financial dieting. While budgeting can include cutting back on spending in some areas, it’s not about restricting yourself. It’s about understanding and controlling your finances to help you reach your goals.

By setting up a budget, you'll be able to:

  • Find and cut unnecessary expenses
  • Save for future goals
  • Be prepared for emergencies
  • Attain financial freedom.

2. Gather All Your Financial Data

Budgeting is all about knowing what you’re working with. Before you can dive into building a budget, you need to gather all the relevant information to get a clear picture of your finances.

This includes:

  • Pay stubs
  • Bank statements
  • Bills (utilities, rent, loans, etc.)
  • Credit card statements
  • Any other sources of income or expenditure./li>

3. List All Your Sources of Income

Once you have all your financial data together, you should be able to list out all your monthly income sources. The obvious source of income is your salary, but you should also include any freelance income, allowances, etc.

Be sure to calculate the total after tax for accuracy.

4. Figure out Your Fixed Expenses

Fixed expenses are the bills and obligations that don't change month to month. Some common examples include:

  • Mortgage or rent
  • Car payments
  • Insurance
  • Subscription services, such as Netflix and Spotify.

5. Identify Your Variable Expenses

As the name suggests, variable expenses are costs that fluctuate from month to month. You will likely always have them as expenses, but the total amount will change based on your spending habits.

  • Groceries
  • Eating out
  • Entertainment
  • Gas
  • Shopping.

6. Set Financial Goals

Ask yourself why you are setting up a budget. Are you saving for a specific purchase, such as a car or a home? Are you trying to gain control of your spending? Are you trying to create a short-term or long-term savings plan? Whatever your goal is, allocate a part of your income towards these goals each month.

Check out our financial calculators, such as our Save Towards a Goal calculator, to help you crunch the numbers and save smarter, not harder.

7. Track Your Spending

Make it a habit to track your spending daily or weekly. You can easily track your spending in Online Banking or on our Mobile App under Accounts. You can also use popular budgeting apps to help you regularly compare your actual spending to your budget to stay on track.

8. Adjust Your Spending

Subtract all expenses (both fixed and variable) from your monthly income. If you end up with a negative number, it's time to reevaluate and adjust.

Ask yourself if you can reduce or cut any variable expenses, cancel any subscriptions or services or even increase your income with a side hustle. These are all important questions to ask to take control of your spending habits.

9. Review Monthly

Life changes, and so will your financial situation. At the end of each month, review your budget. Adjust for any changes in income or unexpected expenses, and plan accordingly for the next month.

10. Celebrate Small Wins

While the ultimate goal might be long-term financial stability, don't forget to celebrate small victories along the way. Paid off a credit card? Saved more than you expected? Celebrate these achievements to keep the motivation going.



Setting up a monthly budget requires discipline and commitment, but the rewards far outweigh the effort. With a clear financial roadmap, you'll be better prepared to navigate unexpected financial challenges, achieve your goals and reach financial peace of mind. Start today and set yourself up for a brighter financial future!


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