Budgeting · July 13, 2020

How to Make a Monthly Budget and Stick to It

It's easy to become overwhelmed by all the bills you have to pay and expenses that keep piling on top of each other. But there are manageable steps you can take to stay on top of your finances. Arguably the most important of these is learning how to make a monthly budget.

Why do you need a budget?

Making a budget and following it allows you to prioritize and focus on financial goals. A budget can remind you not to overspend on unnecessary items. It can also help you evaluate whether you're living within your means or if it would be wise to cut back. Establishing a budget is a great opportunity to set achievable goals, like using $50 out of your monthly income to pay off debt or contributing $100 a month to a retirement account.

How to make a monthly budget

To make your budget, first figure out your monthly income. Then, determine how much money you need for these items.

  • Housing and other bills: You should include your rent or mortgage payment, utilities, phone bill, and car payment or bus fare.
  • Food: Estimate how much you spend on groceries, coffee, snacks and restaurant meals.
  • Healthcare: Include insurance if it's not deducted from your paycheck, as well as copays and out-of-pocket medical expenses.
  • Entertainment: This category covers activities like going to movies or concerts
  • Family: This may include eldercare expenses, as well as childcare and any after-school activities for your kids.
  • Outstanding loans or credit: If you're paying off credit cards or if you've taken out a personal loan, include your monthly payments.
  • Savings: If you're contributing to an emergency fund or saving up for a goal, add that to your budget.
  • Taxes: In addition to the federal and state taxes taken out of your paycheck, include any local or property taxes you pay, too.
  • Other spending: Don't forget clothing, pet supplies, charitable donations and household items.

It's OK if you're not sure exactly how much you spend each month on all of these categories. Look at your recent credit card statements or bank account withdrawals to get an idea. You can adjust these numbers after a month or two of keeping track.

When you add up all your budget items, the total should equal your monthly income. You may find through this process that you aren't factoring in key aspects of your budget, particularly savings, or that you can't predict how much you're going to spend on a certain category each month. Putting together a budget is the best thing you can do to take control of your finances.

Helpful tools

It's easier than ever to get started with budgeting thanks to a variety of personal finance apps that walk you through the process. Personal finance management tools like Manage My Money allow you to link your financial accounts and set up your budget.

If you want to create your budget without using an app, offline tools are available. Look for guides to help you make a budget with spreadsheets. You can also find budgeting worksheets online and print them out if you prefer pen and paper.

Sticking to your budget

Once you've established a budget, the next challenge is sticking to it. You can keep yourself on track by signing up for mobile banking features like automatic bill pay to ensure major budget items such as utilities and your mortgage get paid right away. You can also get notifications about upcoming bills to remind you where your money needs to go.

Set aside some time once a week to look over your spending and check if you're meeting your goals—a tool like the budgeting feature in Manage My Money can be a great help here. When you notice a spending category is using up more money than planned, make adjustments to stay on course. For example, if you've been spending more than usual eating out the last few days, you might decide to stop going to restaurants for a couple weeks to keep your food spending within your budget.

Creating a budget is an essential step in working toward your financial goals. You may be surprised by how much progress you can make just by writing down your priorities and sticking to them.


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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.