Budgeting basics for healthier finances

A closer look at one of the most powerful tools in your financial toolbox.

February 15, 2023

Building a positive relationship between you and your money is our goal, and budgeting is a great place to start. Whether you live paycheck to paycheck or earn more than you spend, budgeting can be an effective tool to get you where you want to go.

The why and how of budgeting

Though it might feel restrictive, a budget is simply a spending plan for a specific time period. Having a plan helps ensure you’re bringing in enough money to cover your all expenses and helps you better prepare for those unanticipated ones.

Let’s look at the steps necessary to create your budget:

  1. Start by listing all your income, where it comes from, and how much you expect to earn. (For example, Job #1: $500 every other week.)
  2. List all your expenses and how often you pay them. This includes all your needs, such as rent/mortgage, utilities, food, vehicle expenses, etc.
  3. Compare your income to your expenses.


Once you have a basic understanding of how much is coming in and how much is going out, ask yourself the following: Do you make enough to cover your expenses? Do you need to make some adjustments to make sure you’re not relying on credit cards or using personal loans to get through the month?

If your income is inconsistent, only list the minimum amount you are guaranteed to make. For example, restaurant servers earn an hourly wage plus tips. Don’t account for tips when creating your budget; simply input your hourly wage earned. Then, add your tips as you receive them. Calculating only your consistent income ensures your expenses don’t exceed your minimum amount earned. Another strategy for those with inconsistent income is to average the last six months of paychecks to get a better picture of what you’re bringing in. This is also helpful for bills like your home’s water bill that may be due every other month rather than monthly.

If you have more income at the end of the month than you need for your expenses, you can choose to put it toward debt, savings, or giving. You’ll want to account for all dollars earned, spent, and even given away and record any changes. Staying informed about your expenses puts you control of your money, rather than letting it control you.

Remember: It’s OK to adjust your budget — in fact, it takes about three months to really understand your budget and how to manage it. Don’t be discouraged! If something isn’t working quite right yet, just make the needed changes and try again.


Help is out there

If this process still sounds daunting, a free budgeting app or website can help make the process easier — and almost fun! Tools such as EveryDollar and Mint can help you create a successful budget of both your income and expenditures. You can also use our Budgeting Worksheet to help formulate your plan.

Whether you’re an experienced budgeter or you’re still learning, UBT can help! Feel free to contact us with any questions.

We hope you found some of our tips helpful! This article is part of the Money Foundation principle, part of UBT's Five Principles of Financial Wellness Series. 


  • Personal
  • Managing Your Money
  • Financial Literacy

Learning Center articles, guides, blogs, podcasts, and videos are for informational purposes only and are not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.