“A budget is telling your money where to go instead of wondering where it went.” – John C. Maxwell
If you’re tired of running out of money before the month ends — you’re not alone. For most Indians, budgeting is either a vague idea or a New Year’s resolution that never sticks. The good news? It’s not as hard as it seems.
In this guide, I’ll walk you through how to create a monthly budget that actually works — and how to stick to it. No jargon. Just practical steps, based on my own money struggles and lessons.
Step 1: Track Your Income & Expenses
You can’t control what you don’t understand. Start by writing down:
- All income sources: Salary (post-tax), freelance gigs, rent, side hustle income
- All expenses: Rent, groceries, EMIs, chai, Netflix, Zomato, recharge — everything!
Recommended tools: Excel, Google Sheets, Walnut app, Money Manager, or even your bank/UPI statements.
Pro tip: Don’t guess — check your statements to find where your money actually goes.
Step 2: Categorize Your Spending
Group your expenses into these basic buckets:
- Essentials: Rent, groceries, bills, EMIs
- Lifestyle: Subscriptions, dining out, online shopping
- Savings & Investments: SIPs, RDs, insurance
- Miscellaneous: Gifts, repairs, random expenses
Just doing this will highlight where you’re overspending.
Step 3: Choose a Budgeting Method
The 50/30/20 Rule
A simple method, especially if you’re salaried:
- 50% – Needs
- 30% – Wants
- 20% – Savings & Investments
The Zero-Based Budget
Assign every rupee a job. Income – Expenses = 0
Great for freelancers or those with variable income.
Step 4: Automate Your Finances
Automate recurring payments so you’re not tempted to skip:
- EMIs & utility bills
- SIPs and RDs
- Emergency fund transfers
Why? What’s automated gets done.
Step 5: Be Realistic — Not Miserable
Cutting expenses doesn’t mean eliminating all joy. Don’t try to go from ₹10,000 on Swiggy to ₹0. Start by trimming 10–20% and allow a small “fun money” budget.
Step 6: Review Your Budget Weekly
Spend 5 minutes every week to check:
- Where you overspent
- Where you can adjust
- If your goals are on track
This helps you catch mistakes early — instead of panicking at the month’s end.
Sample Budget – Take-Home ₹50,000/month
| Category | Amount (₹) |
|---|---|
| Rent | 12,000 |
| Groceries & Essentials | 6,000 |
| Transport | 3,000 |
| Bills (Phone, Wi-Fi) | 2,000 |
| Eating Out / Fun | 5,000 |
| Shopping / Lifestyle | 3,000 |
| Investments (SIP, PPF) | 10,000 |
| Emergency Fund | 3,000 |
| Miscellaneous | 2,000 |
| Total | ₹50,000 |
Budgeting Mistakes to Avoid
- Ignoring “small” daily expenses — they add up
- Not preparing for one-time costs like Diwali shopping or insurance renewals
- Sticking to an outdated budget even after life changes (new job, rent hike, marriage)
Final Thoughts
You don’t need to be a finance pro to take control of your money. You just need to start — even if it’s messy.
Making a budget isn’t about restrictions. It’s about freedom — from debt, anxiety, and paycheck-to-paycheck living.
Ready to make your first budget? Open a spreadsheet, download an app, or just grab a notebook. Your future self will thank you.
Want More Beginner Finance Tips?
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