How to make a simple monthly budget in 5 steps

Updated November 1, 2026

A budget isn't a punishment: it's a plan so your money goes where you want it to. Here is a simple method you can follow in one evening with a bank statement and a pencil.

Step 1: work out your net income for the month

Use what actually lands in your account after tax and deductions: take-home pay, benefits, pensions, side income. If your income varies, base the plan on the lowest of your last three months: a pleasant surprise beats a gap.

Step 2: list your fixed expenses

These come back every month at about the same amount:

• rent or mortgage, insurance, electricity, heating;
• phone and internet plans;
• subscriptions (video, music, gym);
• loan or credit card payments.

Also spot costs that only hit once or twice a year (car insurance, holiday gifts, taxes): divide them by 12 and set that amount aside every month.

Step 3: estimate your variable expenses

Groceries, transport, eating out, fun, clothes, health: these change every month. Look at your last two or three months of statements to get a realistic average rather than a wishful number.

Step 4: set your budget, and keep a margin

The formula is simple:

• net income − fixed expenses − savings = what is left for variable spending;
• that amount divided by the number of days in the month = what you can spend per day.

Keep a 5 to 10% margin for surprises: a budget that is too tight breaks at the first surprise, and people give up.

Example. Net income: $3,200. Fixed expenses: $1,650. Savings goal: $320 (10%). That leaves 3,200 − 1,650 − 320 = $1,230 for variable spending, about $41 per day in a 30-day month.

Step 5: track it, and adjust every week

A budget is useless if it stays in a drawer. Log your spending as you go (forgetting is the main reason people quit), then take a two-minute check each week: where are you against your daily amount? If one category keeps overflowing, fix the budget, not yourself.

The most common mistakes

• forgetting small purchases (coffee, delivery, app fees) that add up;
• not planning any savings: "what is left" almost always ends at zero;
• being too strict: a realistic budget beats a perfect one abandoned after ten days;
• never revising it when life changes (new rent, new job).

Doing it with Leyfin

In Leyfin you set your monthly budget, and the app shows what you have left to spend and the amount per day. Your rent and subscriptions are added automatically as recurring expenses, and the category of an expense is suggested while you type the note. You never have to link your bank.

Keep reading

• The 50/30/20 Rule: How to Apply It to Your Budget
• Track Expenses Without Linking Your Bank
• Save for a Goal: Trip, Emergency Fund and More