How to Create a Budget You’ll Actually Follow in 6 Steps



Maybe you hate budgets. Maybe the idea of tracking your cash and being mindful of every cup of joe you purchase makes you want to hit the nearest wine bar. But here’s the thing: You have retirement goals, right? And things you’d like to do this week or next month, yes? Budgeting helps you hit those goals. An effective spending plan makes it possible to save toward a big trip, a down payment on a house, put money away for retirement, and pay down debt. It also helps you stay in check so you don’t overspend and miss opportunities to build wealth. (And who doesn’t like building wealth?)

But as crucial as budgets are to financial success, not everyone has bought in. Forty-three percent of millennials don’t stick to a budget, according to a 2015 Chime survey, and 90% would rather do laundry (laundry!) or some other chore over budgeting. That’s a fair number of people leaving a really useful tool on the table.

How useful? People with savings plans and goals are nearly twice as likely as those with no plan (84% vs. 46%) to spend less than they make and save the difference, according to a February 2016 America Saves Week survey. Moreover, 85% of planners either have no consumer debt or are reducing the debt they do have, compared to 64% of the planless. That’s a lot of bang for your budgeted buck.

To create a budget of your own, follow these six simple steps:

1. Gather financial documents. Grab your most recent statements from banks, credit card companies, student loan servicers, and other lenders. Don’t forget about mortgage and property tax statements.

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2. List monthly expenses. Start with relatively fixed expenses, such as your rent or mortgage payments, all utility charges, insurance premiums, and grocery, gas, and ongoing prescription costs. Then add spending for more flexible needs and wants, such as clothing, entertainment, and hobbies. As you track your spending, remember to increase or decrease these amounts and/or add new spending categories.

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Related – 4 Financial Strategies for Beating the Millennial Wealth Gap

3. List all sources of income. How much money is coming in each month, from your salary to bonuses to interest and dividends? It’s probably best to calculate your salary based on your take-home pay and any pre-tax contributions, such as money taken out of your pay and deposited into a 401(k) or Flexible Spending Account.

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4. List savings. Any money you’re already socking away in a Roth IRA, a 529 account, a savings account, an emergency fund, or a vacation fund goes in this column.

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5. Review and make adjustments. Once you have a detailed picture of what’s coming in and going out, identify weaknesses in your spending and savings habits. Are you putting too much money toward dining out? Are you taking too many weekend trips or subscribing to every premium streaming service, but paying only the minimums on credit cards?

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If you want to increase savings and put, say, $200 more into your Roth each month, consider cutting back on the trips to Sephora or trading some Blue Apron meals for coupon shopping at your local grocer. If you’re going overboard on non-essentials, try stashing away your credit cards and limiting purchases to cash only.

Also, give automatic deposits a try. By automatically depositing a fixed amount from your paycheck into a Roth or a savings account each week, you’ll be sure to you hit your savings goals every month.

If you’re not tackling debt in ways that make the most sense, refinancing your student loans is also an option. When you’re stuck with several student loans with high interest rates, or private loans with no federal perks, refinancing may not lower your monthly payment, but it could save you thousands in interest over time and shorten your payment term significantly. Getting aggressive with payments may be worth it to you.

For instance, if you have $50,000 in student loans at 6.8% with a 10-year term, by refinancing at 5% for a 5-year term, your payment would go up $369 a month, but you’d save $12,434 in interest and be done in five years. Boom! That’s $12,000 you could put toward a down payment on a home, or toward a college fund for your kids. Careful budgeting can make that happen.

Recommended – Ready for a Vacation? How to Use Credit Card Rewards to Travel for Less

6. Keep regular tabs on your budget. Stay on the right financial track by checking your progress weekly or biweekly. When first starting out, though, you might want to check in every few days to make sure you aren’t overspending on, say, Uber rides when it’s surge pricing. If you find that you really can’t stick to the spending levels you’ve set for yourself, or that you’re regularly spending more than expected on a $20 bottle of wine when a $8 one will do, you may need to tweak your budget to fit your actual habits. Or maybe it’s time to considerearning some cash on the side.

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Budgeting might not be sexy, but the end result—a financial blueprint that will help you hit all of your goals— is awfully appealing. Want to buy a vacation home at 45? Retire at 55? A budget can make that possible. But it won’t create itself; you have to put in a little sweat equity.

Download our easy to use budget worksheet. While it’s not a swanky app, going old school with paper planning may be just what you need to keep it simple. Sticking a budget on your fridge or inside your laptop case may make it easier to stay on track and get your financial life together.

SoFi's Printable Budget Worksheet

SoFi’s Printable Budget Worksheet


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.


ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than half a million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com.


One thought on “How to Create a Budget You’ll Actually Follow in 6 Steps

  1. Golak Bhowmik says:

    The life is portrait of budget. Life timr,education career and performance is under budgetary concept. So nothing to be done without budget

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