There is no hard and fast rule to budgeting. We all have different earning and spending capacities, hence, we must look at our unique situations and plan from there. With that being said, here are five ways that teach you how to make a budget you can use, with practical steps on how to stick to it and a budgeting template you can follow.

Steps on How to Make a Budget You’ll Actually Use

Start from where you are

It is essential to write down how much you expect to earn every month from all your income sources. This can be from your job, investments, businesses, etc.  

A helpful tip here will be to only budget with income that you have a high certainty of receiving, usually earned income. Don’t budget with gifts you have not received yet, even if it seems like it’s guaranteed, so you don’t run into problems if the gifts don’t come.

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How much do you need to make a budget you’ll actually use?

The next step is to figure out how much money you need to survive. How much do you spend on your needs, which is the money you must spend even if you were not earning any money? Economists call it the autonomous expenditure. 

This would include everything you cannot live without like food, shelter, transportation, internet, electricity, etc. How much do you spend on essentials every month? Write down your needs.

After you have written down how much you must spend to live every month, subtract that figure from your income. Whatever is left is the amount you actually have to spend.

Having a clear picture of how much you earn and how much you must spend to survive will help you know how much you have to spend. Because as we said earlier, you must spend on your needs which are non-negotiable.

Plan For Your Wants

This includes all the things that would be nice to have and the things you’ve always wanted. Having a budget doesn’t mean that you can’t get nice things for yourself or anyone else. It just means that you can plan for those nice things so you don’t go beyond what your pockets can afford.

It is important to be very honest with yourself as you write down your wants. Don’t budget for only one outing every month when you know you like going out with your friends every weekend. When you are honest about who you are and the things you love to spend on, budgeting becomes easier and you’re even motivated to earn more.

You can even experiment with it. Include all the nice things you really want, then subtract that from what you have left over. Whatever you have left is what you can save and invest out of.

Are you happy with the amount you have left to save and invest, especially when you’ve considered that if anything happened to your primary source of income, what you’d be left with is your savings? If you only saved that amount for a year and a few months, would you have sufficient savings?

If Not, Then You Can Do One of These Two things

  1. Go back and look through your expenses. Start with your wants and cut down on the expenses you can live without. If you do this and are still unhappy with the amount you have left to save, try reducing the money you spend on your needs. Look for cheaper alternatives that still meet the same need. 

For example, if you only eat out, you can decide to cook at home. Or, if you cook in small quantities, would cooking and buying in bulk save you some money? In the longer term, can you move to a cheaper place or move closer to your workplace, so you don’t spend so much money on transportation?

  1. If you’ve tried everything in option one and still are not arriving at a number you are happy with, then your only option is to earn more money. This article talked about 10 ways you can make more money in 2022.

This brings us to the end of the budget conceptual stage on how to make a budget you’ll actually use. The next step is implementation.


Since you already know how much you have left to save and invest, immediately you receive your monthly income, remove your savings and investment money from it first. 

If you have another account, it is wise to transfer the money for your needs to a separate account, so you have two spending accounts — one for your needs and one for your wants. You can also set up direct debits to do all of these for you.

When You Do This, A Few Things Can Happen.

The ideal situation will be that you follow your budget judiciously such that you spend exactly what you planned to spend; or even better, you still have some money left over at the end of the month, so you have more to spend.

The more likely outcome is that the money you plan to spend will not be enough. As inflation keeps rising everywhere, even the best budgets may not be able to withstand its pressure. When this happens, you can do a few things.

As humans, we can often make do with what we are given. Don’t underestimate your ability to stretch that little money you have left. You can choose to manage whatever you have left till the next month, or you can borrow out of your savings and replenish it later. 

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Reviewing How to Make a Budget You’ll Actually Use

As our lives continue to change, either by us earning more or the cost of living becoming more expensive, we need to adjust our budget to our new reality. Budgeting is not an event; just like eating, it is continuous. You need to eat every day to stay alive. That’s also how it is with budgeting. 

Keep looking back at your budget. How well did you do with the budget this month? How can you improve in the future? Did you forget to include something in the budget? Or has a new expense or income come up that changes the budget? Review your budget often and make necessary changes.

Final Tip on How to Make a Budget You’ll Actually Use 

Be flexible in your planning and be willing to forgive yourself. Remember that the budget is there to serve you and not the other way around. You may fall short sometimes.

You might need to dip into your savings because the amount you budgeted to spend was not enough. This could be due to the rise in prices of goods and services (as can be expected with the Nigerian economy) etc.

Be willing to forgive yourself when this happens. With budgets, we can sometimes feel like there’s no point in following through with the plan if we fail one month. Don’t let yourself give up. Keep improving your budget as time passes. Budgeting is not an event; it’s a lifestyle.

Simple Budget Template
Other Income
Internet & Airtime5,000
Total Expenses70,000
Income After Expenses30,000
Personal Upkeep10,000
Family Support5,000
Income Left for Saving & Investing10,000

Note: While we pay rent annually in Nigeria, you can divide your rent into what it will cost monthly and budget with that figure in mind. That can also allow you to set aside money for rent each month so it’s easier for you to pay rent at the end of the year.