Budgeting 101: A Beginners Guide to Managing Your Money
- primaraldinternshi
- Jul 4
- 3 min read
Updated: Jul 5
Hey Budgeteers!!! Ready to move up your money moves today? Let's dive into another smart budget post.
Let’s face it: money management can feel overwhelming—especially when it seems like your salary disappears before the month ends. But budgeting isn't about restrictions—it's about freedom. Freedom to spend wisely, save intentionally, and sleep better at night.
Whether you're living paycheck to paycheck or trying to hit a savings goal, this guide will walk you through Budgeting 101 in plain, simple language.
What is a Budget?
A budget is a plan for how you spend and save your money. Simple right? A budget helps you know:
What's coming in (income)
What's going out (expenses)
What you're keeping (savings)
It's like giving every naira or cent a job before it disappears.
Now that we have established what a budget is, the next step is knowing budgeting basics for a better money habit and effective budgeting.
Step-by-Step: How To Create A Beginner-friendly Budget
How to create a budget, curating a simple budget plan or even how to create a budget that works for you is as easy as scrolling through TikTok. Here is how to budget your money:
Know your income
Write down all your sources of income for instance
Salary
Side hustle income
Gifts or freelance income
Tip: Use your net income (after tax and deduction), not gross
List Your Monthly Expenses
Break them into two categories:
Fixed (what you spend on every month)
Rent
Food
Transport/fuel
Electricity
Subscription (e.g data plan, decoder and cable Netflix)
Variables (you don't spend on these things monthly, it changes sometimes)
Shopping
Entertainment
Entertainment/selfcare
Track Your Spending
Before you can cut down on expenses and spending, you need to know where your money goes. Try apps like:
Money manager
Spending Tracker
Or just a simple notebook or spreadsheet
You might be shocked how much you spend on "small things" (like daily shawarma for some of us)
Set Financial Goals
Short-term goals: build emergency fund, buy a new phone
Long-term goals: save for a house, car or travel
Having goals give your budget purpose
Pick A Budgeting Method
Split your income and fit it into the 50/30/20 rule (great for beginners)
50% Needs (Rent, food, transport)
30% Wants (clothes, outing)
20% Savings or repayment of debt
For cash spenders divide money into labeled envelopes for each expense.
Adjust and Stay Consistent
Your first budget won't be perfect and that okay.
Each month review:
Did I overspend anywhere?
Can I cut anything?
Did I save enough?
Keep tweaking until it works for you.
Tips For Sticking To Your Budget
Automate savings if possible
Use cash for categories you overspend
Meal plan to cut food cost
Unsubscribe from stuff you rarely or don't use
Track weekly, not monthly
Common Budgeting Mistakes to Avoid
Budgeting can be a game-changer—if done right. But many people fall into the same traps that sabotage their efforts before they even start. Here are the most common budgeting mistakes (and how to avoid them):
Not Tracking Your Spending
You can't control what you don't measure. Many people think they know where their money goes—until they actually track it. Utilize the tracking apps or a notebook or spreadsheet to track your money.
Making Your Budget Too strict
Trying to cut out all fun or treats might look good on paper—but it rarely works in real life. You’ll burn out and give up. Always leave room for small joys
Forgetting irregular or emergency expenses
Some expenses don’t happen every month—like birthdays, car repairs, or annual subscriptions.
Set aside little funds for these surprise-but not-really expenses
4. Not Adjusting Your Budget
Life changes—so should your budget. If your income drops or you get a new expense, your budget needs to adapt too. Review and adjust your budget monthly. It’s a living plan, not a fixed rule
Relying too much on Memory
Telling yourself “I’ll remember” instead of writing down expenses = budget disaster.
Write. It. Down. Or input it into your app immediately. Don’t wait till “later.”
Not including savings as a priority
Comparing your budget to others
Giving up after one bad month
Final Thought
Budgeting takes practice, you won't get it right at the first try. Mistakes will happen but with each one you get bettebetter and smarter. And as I always say Budgeting is not about being being cheap—it’s about being in control. When you tell your money where to go, it stops controlling you. So start small, stay consistent, and watch your finances turn around.
Now it's your turn!
Which budgeting method do you use or plan to try? Leave them in the comments I'd love to hear from you and also don't forget to share with a friend who could use a budgeting glow-up
Let your budget girl know the next area of your life you need budgeting and if you haven't, check my other "budget posts"
Favour Fineman
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