Overview
A budget is a plan for your money. Without one, spending happens by accident. This guide walks you through creating a budget that works — step by step.
What you'll need:
- Your net monthly income (after tax)
- Last month's bank transactions (export as CSV from your bank)
- 20 minutes
Step 1: Know Your Income
Use your net income — what actually arrives in your bank account. If income varies, use the lowest of the last 3 months.
| Income Type | What to Use |
|---|---|
| Fixed salary | Exact net amount |
| Freelance / variable | Lowest of last 3 months |
| Multiple sources | Sum of all sources (use lowest month) |
Step 2: Track Current Spending
Before setting limits, see where your money actually goes. Export your bank transactions as a CSV and upload them to Trakzi. Transactions are auto-categorized instantly.
Why this matters: Most people underestimate spending by 20-30%. Data beats guessing.
Step 3: Choose a Method
50/30/20 Rule
Split income into three buckets:
- 50% — Needs (rent, groceries, utilities, insurance)
- 30% — Wants (dining out, entertainment, subscriptions)
- 20% — Savings and debt repayment
Best for: Beginners. Simple, flexible, no tracking per category required.
Zero-Based Budget
Assign every euro a category. Income minus all allocations = zero.
Best for: People who want full control. Requires weekly tracking.
Envelope Method
Allocate fixed amounts per category at month start. When an envelope is empty, stop spending in that category.
Best for: Overspenders who need hard limits.
Step 4: Set Limits
Look at your tracked spending (Step 2), then set category limits:
- Be realistic — if you spend €400/month on groceries, don't budget €200
- Add a 5-10% buffer for unexpected costs
- Automate savings — transfer to savings on payday, before budgeting the rest
Step 5: Review Weekly
Set a recurring 10-minute check:
- How much spent so far this month?
- Any category over budget?
- Adjust if needed
A budget is a living document, not a one-time setup.
Common Mistakes
- Too tight. Leave room for enjoyment or you'll abandon it.
- Ignoring irregular costs. Divide annual expenses (insurance, subscriptions) by 12 and budget monthly.
- No tracking. A budget without tracking is just a wish list.
- Giving up. Bad months happen. Reset and continue.