How to budget and save money

How to budget and save money

Follow me on social media!

In this post, you will learn how to budget and save money. Simple tools like excel or google sheets can work for you – and they worked for me in the past.

If you struggle to make ends meet, you should think about creating a budget for yourself.

Even if you don’t struggle, a budget only adds to your life. You will sleep much better because you don’t have to worry about money ever again – if you live within your means.

Companies do it all the time – they create budgets and stick to them – and profit from it. So why shouldn’t you do the same?

If you really want to learn how to budget and save money, you have to track your spending first


Create an excel file, take out a sheet of paper, or your phone – it doesn’t matter. Now write down all the income you have – from your job, from your parents, from your side-gig. Every penny has to be written down and accounted for.


If you want to learn how to budget and save money, you have to know your expenses as well. This is why I want you to write down all the fixed expenses you have, let’s start with the yearly ones (Car insurance for example) then the quarterly ones (Some taxes maybe), and last but not least the monthly expenses (Spotify, Gym, Netflix, Rent).

Okay, now we are all set with our fixed expenses. The next step will be our variable expenses.  If you have never tracked before, you have to assume what you might spend in a month on variable expenses like groceries, clothing, eating out. Do you have any old receipts we can use for that? Take them out of your pocket and read through them.

Write everything in your excel file with a declaration when you have to pay it – then divide everything so you find out what the monthly payment is. (Example: Car insurance is 600€/year divided by 12 months is 50€/month)

Track everything for a while

To verify your variable expenses track them for a while – and I mean every cent.

This isn’t very easy of course and I have to tell you – if you want to know how to budget and save money, you have to do it regularly. Save all the receipts you get and put them in your file. 

I would say do it for three months so you have a rough overview, but if you can’t stick to it, even a month is fine enough – but you need at least some data.

For me using YNAB helped me a lot. If you want to subscribe to YNAB you can click here and get one month of free premium.

End of 2020 Edit: I was able to increase my net worth by 92% this year using YNAB. And this is huge for me. 

Evaluate your spending

Yes, knowing that you spend 200€/Month on Starbucks is good – but spending that much isn’t. Find out where you can maybe save some money – it’s totally up to you though, I cannot give you recommendations where you should spend your money – but take a hard look at yourself.

This is the critical part of learning how to budget and save money – regulating your spending. 

Create an emergency fund

A good practice is having an emergency fund to survive about 3-6 months on it without any income.

Let’s say I earn 2.000€ a month. and I spend 1500€ per month. This means I need 1.500 x 3 = 4.500€ in my emergency fund saved up.

Since we have 500€ left over per month, we are able to reach our emergency fund within 9 months.

Once you’ve reached that it’s a good practice to put away 10% of your monthly income for retirement. It might sound like a lot right now but once you’ve accommodated yourself to having only 90% of your income, it’s not a big problem.


Having a good overview of your finance not only allows you to make good financial decisions, but it also helps you be more confident money-wise.

Follow up on my latest post about my category setup in YNAB.

A quick example for retirement

Investing 100€ per month for 45 years (assuming you start at 20 and stop at 65) into an index fund which costs 0,2% per year and increases by 7,5% per year on average, means you invest 54.000€ and end up with 388.000€ in the end. That’s massive.

What does this tell you? Knowing your expenses and not overspending every month can give you a nice cushion when you get to retirement – you don’t even have to renounce on things right now, you just have to be mindful of your spending. This is how you budget.

If you have any questions on how to create a budget yourself, let me know in the comment section down below and I am happy to help.

Click HERE if you want to improve yourself in other areas as well!


Have a look at all my other articles by clicking 


Print Friendly, PDF & Email