How to make your first budget

Well, it’s not so hard; you just need to start by analyzing your income sources and expenditures. At first, enlist and sum up the total income from all the sources, e.g., salary, business, rental income, interest income, pocket money (if you are a student), stipend, and any other side income, etc.

Then enlist your fixed expenses, e.g., house rent, utilities, vehicle loan EMIs, insurance premiums, mobile recharge, etc.

Enlist those expenses which are subject to change every month under your variable expenses, e.g., fuel, food, shopping, entertainment, etc.

Take a blank page, a ruled page, or a mobile notes app if you want to make it paperless. Write down the said things one by one.

At first, the ‘Resource/Fund Allocation’

Use the 50-30-20 rule as a base to start your first budget:

50% – toward needs like food, fuel, rent, etc.

30% – toward wants like shopping, subscriptions, outings, etc.

20% – toward savings and investments.

The last one is the most important. No matter how low or high your income is, you should always save/invest at least 20% of your net income every year. If you are struggling to manage your expenses in the early months of your income and you are unable to manage 20% toward investments, then get it to at least 10% for a good start rather than avoiding it completely. We can increase it gradually by efficient expense mapping and budgeting later.

I am sharing my 1st budget here with you when I started budgeting on my own.

My budget for MARCH 2025

So at the end of this month I am left with no surplus as the income and expense are equal. They may not be always equal. If you are left any unutilised money at the end of the month, then divert it to your investment expenditure.