Everything you need to know about creating, maintaining, and updating your budget, including how the process works. Learn how to make wise financial choices and avoid common budgeting mistakes.

Frequently Asked Questions
  • How do I make a budget?

    Start by calculating your take-home pay. You'll need to know how much money is coming in, and then you need to start tracking and categorizing your expenses. What are your fixed costs such as mortgage payments? What are your variable expenses such as food? Now you can start developing short and long-term goals.

  • Why do I need a budget?

    A budget can put you on a stronger financial footing in your day-to-day life and for achieving your long-term goals. By categorizing and tracking expenses you may find it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home.

  • How much should I budget for food?

    It varies based on how many people you're feeding. If you follow the 50/30/20 budget plan, you should spend no more than 50% of your budget on things you need for survival such as groceries, utilities, and housing costs. For food, specifically, the USDA has some guidelines for thrifty, low cost, moderate cost, and liberal spending that are worth examining.

  • Do I need a budgeting app?

    Budgeting apps can be very helpful for tracking your spending, but they are not for everyone. They can be great for tech-savvy people who make most of their purchases using a debit or credit card. But if you usually use cash, you may find entering your expenses manually to be tedious and unnecessary. For those folks, consider the envelope system.

Key Terms

Explore Budgeting

Man Inspecting Machine
Total Cost of Ownership: How It's Calculated With Example
Woman wearing diamond ring
Guide to Buying a Diamond Ring at Costco
Zero-Based Budgeting: Benefits and Drawbacks
City in Austin, Texas
Cost of Living in Texas vs. California: What's the Difference?
Couple counting money
What Is Discretionary Income? How to Calculate, With Example
Performance Budget: Advantages and Disadvantages
A business person reading data on paper charts and computer.
Schedule Loan Repayments With Excel Formulas
Man selling chairs
Big Box Stores vs. Small Retailers
Woman shopping
Sam's Club vs. Costco: Which Has Better Deals?
Uber: Advantages and Disadvantages
Service Charge
Service Charge Definition, Types, and Why It's Not a Tip
Woman's hand putting coins into a saving jar with coins on the table
Fund: Definition, How It Works, Types and Ways to Invest
Shoestring Budget: What it Means, How it Works
6 Things You Didn't Know You Can Recycle
How Buying on Amazon.com Works
The Cost of a Road Trip Across the United States
A businessman examining papers before signing at meeting in office.
Extended Warranties: Should You Take the Bait?
Internet Mobile Banking and Internet of Things Concept
Shopping Online: Convenience, Bargains, and a Few Scams
Reasons Why Banks Wont Cash Your Check
Top Reasons Banks Won't Cash Your Check
What Is Disposable Income, and Why Is It Important?
Priceline vs. Hotwire: What's the Difference?
Deferred Compensation
What Is Deferred Compensation?
Money transfer system
Xoom vs. Western Union: What's the Difference?
How Much Is Your Used Nintendo Worth?
Jobless claims chart
Help, My Unemployment Benefits Are Running Out
Automatic Bill Payment: What it is, How it Works, Pros and Cons
How Can I Budget for Short-Term Expenses and Long-Term Goals?
What a "Lemon" Product Is, and How to Avoid Purchasing One
A smiling man with credit card paying bills online at laptop at kitchen counter.
Electronic Bill Payment & Presentment (EBPP): Definition, Types
Business travel
Lodging Expenses: What They are, How They Work
Businessman With Wheeled Luggage in Suite
Why Do Priceline and Hotwire Hide Hotel Names?
Man with briefcase on elegant street
Why Upper-Middle Earners Are Living Paycheck to Paycheck
Mom and two kids standing beside "for sale" sign in front of home
7 Homeowner Costs Renters Don’t Pay
Is Living in Europe Cheaper Than Living in America?
A Young woman using laptop, paying with credit card.
Expedia vs. Orbitz: Comparing The Rewards
A young woman shopping in the city and carrying paper bags.
Average Cost of American Holiday Spending
The Best Way to Give the Gift of Travel
When Is It Cheaper to Fly to Australia?
Discretionary Expense
Discretionary Expense Definition, Examples, Budgeting
Best Ways to Exchange Currency in Europe
A woman labelling boxes in the process of packing to move house.
Know the Cost of Living Before Taking a Relocation Package
Waikiki Beach
When Is It Cheaper to Fly to Hawaii?
Computer keyboard with a tiny shopping cart parked on it and a red Cyber Monday button.
What Is Cyber Monday, History and Milestones?
Food Bank
Autonomous Consumption: Definition and Examples in Economics
Store display of gift cards
What Are the Pros and Cons of Gift Cards?
3 Reasons Costco Has Membership Fees
A smiling couple talking while sitting with a financial adviser in office.
Budgeting for the 4 Phases of Retirement
How Does Airbnb Protect Customers?
Best Places to Exchange Currency in Miami
A sample of a monthly budget on a notepad
The Beauty of Budgeting
U.S. One-Hundred Dollar Banknotes and Indonesian 100,000 Rupiah Banknotes
Best Ways to Save on Currency Exchanges
Cost of Living in the U.S. vs. the U.K.: What's the Difference?
Are Wine Clubs Worth It?
Should You Pay in Cash?
A private jet on a runway.
How Much Is a Private Jet?
Household Expenses: Types, Examples, and How to Compute
8 Tips To Help You Control Holiday Spending
Businesswoman counting money at office.
12 Tips for Retiring With Just $50K Net Worth
Car Allowance Rebate System (CARS)
Car Allowance Rebate System (CARS)
Paycheck to Paycheck: An expression describing an individual who would be unable to meet financial obligations if unemployed.
Living Paycheck to Paycheck: Definition, Statistics, How To Stop

Budgeting & Savings