Dealing with your personal finances in 2023 can feel like riding a rollercoaster in the dark. But it doesn’t have to.
If money feels like a super overwhelming area of your life, creating a budget provides you with a roadmap out of a stressful financial situation. It requires a little effort at first, but the reward is financial freedom: to be able to live your life without constantly worrying about your finances.
And because it’s 2023, and we need to culturally move away from spreadsheets, we’re gonna show you how to start budgeting with the help of our super smart AI money app (that’ll do most of the work for you. For free).
Here’s how to start budgeting:
How to Start Budgeting | Step 1: Track Your Spending
The first step to creating a budget is to understand where your money is going. Start by tracking your spending for a month. You can do this by using a budgeting app like, ahem, Cleo, which can automatically categorize your expenses and give you insights into your spending habits. Cleo can also show you how much you’re spending on different categories like groceries, transportation, entertainment, and more. More on this a little further down.
Once you have a clear picture of your spending habits, you can identify areas where you might be overspending and make adjustments to your budget.
How to Start Budgeting | Step 2: Set Your Financial Goals
Before you can create a budget, you need to know what you’re working towards. Set realistic financial goals that are specific, measurable, achievable, relevant, and time-bound. Examples of SMART financial goals include paying off debt, saving for a down payment on a house, or building an emergency fund. (If you don’t have an emergency fund, it’s recommended to create one that covers 3-6 months of expenses.)
As we said, make your goal super specific. Choose a number you want to reach. Once you’ve followed the next steps, you can create a plan for how much money you can realistically put towards your goals each month, and a timeframe for this.
With solid financial goals, your budget has a reason behind it. The more you stick to it, the closer you get to your goal. That’s your motivation.
How to Start Budgeting | Step 3: Create a Budget
Now it’s time to create your budget. Creating a budget generally starts by listing all of your income sources, including your salary, freelance income, and any other sources of income you may have. Then, list all of your expenses, including fixed expenses like rent and utilities, and variable expenses like groceries and entertainment.
Because you’re literally on the Cleo blog right now, we’ll just mention that after you’ve downloaded Cleo for free, she can do all of the above work for you. Cleo can help you create a budget by analyzing your spending patterns and recommending a budget that aligns with your financial goals.
Here’s how it works:
1) Get connected 🤝 – Download the free app, sign up, and connect your checking account.
2) Income 💸 – Select your latest paycheck(s) so Cleo knows when you get paid
3) Bills 👀 – Add your bills and double-check to see if they’re right so they can be tracked correctly
4) Spend limit 🥡 – Set a realistic spend limit
Each month, she'll show you how much money you’ve got coming in and how much money you’ve got going out. Cleo will also alert you when your bills are due and how much you’re spending on certain categories including:
💡 Bills 🎂 Groceries 🏦 Bank charges (gross) 🚆 Transport 🛍️ Shopping
How to Start Budgeting | Step 4: Stick to Your God Damn Budget
Ok, this is the bit that requires a little effort, but Cleo is here to help.
Once you’ve set your spend limits, Cleo will call you out when you’re about to reach them. This makes it easier to avoid impulse purchases because you can’t plead ignorance. Sorry.
Cleo will also make saving easier with AutoSave. This way, if you have enough money, Cleo will transfer a certain amount to your Cleo wallet each week. So you just have to sit back and watch your savings build.
And if you really need some help staying motivated, type “roast me” into the chat with Cleo. We dare you.
How to Start Budgeting | Step 5: Monitor Your Progress
Once you’ve created a budget and started sticking to it, it’s important to monitor your progress. Regularly review your budget to see if you’re on track to achieve your financial goals. If you’re not, make adjustments to your budget or your spending habits to get back on track.
Cleo can help you monitor your progress by providing insights into your spending habits and giving you feedback on your budget.
Importantly, monitoring your progress isn’t just about checking the numbers. Congratulate yourself for all the good stuff you’re doing. Reaching your financial goals requires a ton of self-discipline.
And if you’re struggling with the self-love thing, Cleo’s got you there, too. Type “hype me” into the chat, and see what happens.
How to start budgeting: Final thoughts
Look, we’ve been saying budgeting is sexy for years. Although it doesn’t have the reputation it deserves, budgeting is a powerful tool that can help you take control of your finances and achieve your financial goals.
By tracking your spending, setting financial goals, creating a budget, sticking to your budget, and monitoring your progress, you can achieve financial freedom and relieve money stress.
Whether you’re just starting out on your budgeting journey or you’re a seasoned pro, Cleo can help you achieve your financial goals. With Cleo, you can automate your savings, track your spending, and get personalized insights into your finances..
Remember, it’s never too late to start budgeting and taking control of your finances.
There’s only one thing left to do…
Enjoy this post? Give it a share or send it along to a friend. You never know, it could make a big difference. Big love. Cleo 💙