20 budgeting tips for easy money management

A couple seated side by side at a table smile while using laptop to create a budget.Image: A couple seated side by side at a table smile while using laptop to create a budget.
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Budgeting is an essential part of a healthy financial life.

It allows you to create a spending plan for your money to ensure you always have enough for the things that are truly important to you. Rather than being restrictive, these 20 budgeting tips help you form a clear picture of your spending money and can help you discover extra income that you can use more efficiently.

People who budget successfully can set themselves up to get out of debt faster, achieve their savings goals over time and practice smart spending. The best part is that it only takes a few easy tweaks to your money routine to implement good budgeting habits.

Naturally, there are some things that are worth doing every day. We stay physically healthy by taking care of our hygiene and staying active. So why is it so hard to exercise this same kind of daily care to strengthen our financial foundation? Read on to learn about quick and simple things you can do every day to stick to your budget.


  1. Create your budget before the month begins
  2. Practice budgeting to zero
  3. Use the right tools
  4. Establish needs versus wants
  5. Keep bills and receipts organized
  6. Prioritize debt repayment
  7. Don’t forget to factor in fun
  8. Save first, then spend
  9. Start contributing to retirement now
  10. Split your direct deposit
  11. Expect the unexpected
  12. Plan for large purchases
  13. Include a contingency category
  14. Adjust your budget monthly
  15. Outline specific, realistic goals
  16. Observe a no-spend day
  17. Don’t be too hard on yourself
  18. Try cash-only budgeting
  19. Budget for your financial situation
  20. Be flexible

1. Create your budget before the month begins

To stay on top of your budget, plan ahead. A week before a new month starts, sit down and plan your next month’s activities and expenses.

For instance, you may have a road trip or vet appointment one month but not the next. Once you’ve planned your month, set a realistic budget.

2. Practice budgeting to zero

Budgeting to zero means tracking every dollar you earn and giving it a place in your budget until you don’t have a single dollar to spare.

Let’s say, for example, you earn $4,000 a month. After budgeting your savings contributions, investments, fixed expenses and any additional spending, you should have no money left over.

Budgeting to zero can show you where your money is going and give every dollar you earn a purpose.

3. Use the right tools

Set yourself up with the right tools to ensure success from the beginning. Track your money with a budgeting app or use apps to keep track of money spent on shopping or healthcare costs. Powerful budgeting tools can help you track where your money goes, push you to prioritize your goals and bills and alert you if you spent too much on one category.

4. Establish needs versus wants

50-30-20-ruleImage: 50-30-20-rule

“Needs” are anything crucial for your basic physical, mental and financial well-being — think food, rent and debt repayment. These should always be factored into your budget and can be found in Credit Karma’s budget calculator.

Consider the 50/20/30 rule, which allocates approximately 50% of your income to essential items, 20% to savings or debt and 30% to non-essential items that will enhance your lifestyle.

5. Keep bills and receipts organized

Keep your bills and receipts organized in case you need to refer back to a bill to dispute it. This may also come in handy for tax purposes.

You can choose to file documents physically via hanging files or expandable folders. If you opt for physical filing, sort your documents by account or by month, depending on what works for you. If you receive your bills and receipts mostly via email, you may want to file everything electronically.

6. Prioritize debt repayment

credit-scoreImage: credit-score

If you’re able, prioritizing debt payments may save you money on interest and reduce financial stress. It’s important to keep your debt down because it affects credit utilization. In general, it’s best to keep your credit utilization at less than 30% of your limit.

7.  Don’t forget to factor in fun

Part of an ironclad budget is planning for fun in addition to everything else. When you put money aside for nonessential activities, you ensure there’s enough to enjoy without the risk of overspending.

Whether it’s a weekend getaway, a night out with friends or a special treat, setting aside a small amount of money each month is a great way to stay on top of your finances and avoid sacrificing fun for financial freedom.

8. Save first, then spend

Think of saving as a fixed expense and factor it into your budget accordingly. According to billionaire Warren Buffett, it’s essential to prioritize your savings, and he recommends automating contributions to avoid temptation.

9. Start contributing to retirement now

You’ve likely heard it before, but we’ll say it again: It’s never too early to start saving for retirement. If possible, consider maxing out your employer’s retirement matching program. Starting early can ensure that you don’t put extra strain on your budget further down the line as you attempt to catch up.

10. Split your direct deposit

If you have direct deposit through your employer, consider setting it up so that a certain percentage of your income goes straight into your savings account. This way, automation does the work for you.

11. Expect the unexpected

plan-your-budget-in-advanceImage: plan-your-budget-in-advance

Sometimes, all the planning in the world can’t prepare us for unexpected expenses. Things like car repairs or trips to the emergency room are impossible to predict.

That’s why it’s crucial to factor an emergency fund into your budget. For starters, aim to save the smallest amount that will make you feel taken care of in an emergency. After that, experts typically recommend securing three to six months of expenses so you’re at peace in the event of an emergency.

12. Plan for large purchases

If you’re considering purchasing an expensive item like a new laptop or TV, the key is planning ahead. Decide a date that you want to make the purchase, and divide the price by the number of days you have.

For example, if you want to purchase a $1,500 computer in 300 days, you just need to save $5 per day. This keeps you from charging the item to a credit card, potentially putting you in serious debt and causing you to pay interest charges until you can pay the balance off.

13. Include a contingency category

Sometimes an expense won’t fit perfectly into your budget categories. That’s where having a contingency comes in handy. Here’s the catch: Ensure you’re not using it as an excuse to overspend in any of your other categories. If you find you’re consistently going over budget in food, shopping or any other area, consider modifying your budget instead of funneling it into your contingency.

14. Adjust your budget monthly

Your needs will change, and a budget shouldn’t be set in stone. Consider re-assessing your budget monthly to get a pulse on how well you’ve been sticking to it. If you notice you’re consistently overspending in one category and under-spending in another, even out your budget to make it more achievable.

15. Outline specific, realistic goals

Remember that the most easily achievable goals are SMART — specific, measurable, attainable, relevant and timely. Instead of saying, “This year, I want to save more,” try, “I want to have $1,000 saved for an emergency fund by December 31.”

16. Observe a no-spend day

Designate one day per week when you don’t spend any money aside from what’s absolutely necessary. This is an easy way to make sure weekly spending stays within your budget range.

If you’re having a hard time putting money away, consider a whole no-spend month. The idea is to go a whole month spending money only on the bare necessities and putting all the extra cash into savings.

17. Don’t be too hard on yourself

Getting used to a new budgeting routine may take a few months to make perfect. Your budget may not be perfect the first or the second time around. Be kind to yourself and your budgeting lifestyle as you settle into your new routine. Focus on making daily decisions with your budgeting goals in mind to help establish new habits.

Sticking to the plan will help you get the most out of your income and give you peace of mind that every dollar in your checking account is going to a specific purpose.

18. Try cash-only budgeting

Cash-only budgeting involves only using cash for all purchases and tracking spending on a regular basis. This budgeting method makes it easier to see how much money you have left to spend and make sure you stick to your budget.

Additionally, cash-only budgeting allows you to make conscious decisions about your spending since it forces you to pay attention to where your money is going.

19. Budget for your financial situation

For an effective budget that works long term, you’ll want to consider your financial situation. Hopeful budgeting — planning expenses based on possible income — can cause you to incur debt instead of savings. On the other hand, outlining a budget that ignores part of your income could lead you to waste money or overlook wealth-building opportunities like investing.

Set realistic goals for yourself, including savings, paying off debt and investing in your future. Factor in unexpected expenses, like car repairs or medical bills to ensure that you are prepared for those costs before deciding how to organize your funds.

20. Be flexible

Life is unpredictable, and sometimes our financial situation can change drastically. When budgeting, it’s important to have a plan and stick to it but also be prepared to make changes when necessary.

This can mean cutting back on some expenses, finding ways to save money or being open to new ideas and opportunities that can help you save money.

Being flexible with a budget can help you stay on track and confidently build a solid financial foundation.