How to make a monthly budget (and actually stick to it)

A budget is simply deciding, before the month arrives, where your money goes. Without a plan, money drifts; with a plan, you choose. Here is a simple way to build one.

Step 1: add up your real income

Count only what actually reaches your pocket: net pay, extra income and any regular inflow. If your income varies (freelancing, commissions), use a cautious average of recent months.

Step 2: list your fixed expenses

Rent or mortgage, utilities, internet, transport, loan payments, subscriptions. These get paid no matter what, so they go first.

Step 3: estimate the variable ones

Groceries, eating out, going out, clothes, surprises. Base them on what you really spent in recent months, not on what you wish you had spent. That's why it helps to track before you budget.

A well-known guideline: 50/30/20

• 50% for needs: housing, utilities, groceries, transport.
• 30% for wants: going out, fun, non-essential purchases.
• 20% for savings and paying down debt.

It's only a starting point. If rent takes more than 50%, adapt the percentages to your reality; what matters is that saving comes first, not from whatever is left over.

Step 4: check in mid-month

A budget you only look at at the end is useless. Compare spending with the plan halfway through and fix things in time. If a category ran over, don't abandon the plan: move money from another one or spend less for the rest of the month.

Tip: Include a "surprises" category. Without one, the first surprise breaks your budget.

With HeyCents

In HeyCents you can create budgets from Profile and see how you're doing during the cycle. Because the assistant also makes changes for you, you can ask it by text or voice to create a budget or a reminder. Debts and savings goals live in the same place, so you see your whole money picture, not just spending.