How to Start a Budget (Even If You’re Broke)

Ever feel like budgeting is only for people who already have money? The truth is, a budget is most important when you’re broke. Creating a simple budget plan helps you take control of your spending, stop living paycheck to paycheck, and start building the financial life you want. The good news? You don’t need fancy apps, spreadsheets, or financial degrees to get started. All you need is a pen, paper, and the willingness to track your expenses. This guide will show you exactly how to start a budget, even if you’re broke, in 5 easy steps you can do today.

✅ Step 1: Track Your Expenses

Before you can create a budget, you need to know where your money is going. For one week, write down every single expense, no matter how small. Coffee, snacks, apps, bus fare—it all counts.

Why this works:

You’ll quickly spot patterns (like daily habits draining your wallet).
You’ll see where you can cut back without feeling deprived.

📌 Pro tip:

If you’re forgetful, use your bank’s mobile app or a free expense tracker to pull up transactions automatically.
Use a free app or download a budget template for beginners to make this easier.

✅ Step 2: Identify Your Income

Next, list every source of money you have. That could be your paycheck, side hustle earnings, or even irregular income. Don’t leave anything out.

When you’re broke, your income may feel too small—but clarity is power. Seeing the full picture will help you create a budget that matches reality.

✅ Step 3: List Your Essentials

Now, write down your essential expenses—things you must pay to survive:

Rent or mortgage
Utilities
Groceries
Transportation
Minimum debt payments

These are your non-negotiables. Add them up. This shows you how much of your income is already “spoken for.”

If the total is more than your income, don’t panic—we’ll deal with that later. For now, you’re building awareness.

✅ Step 4: Cut One Small Habit

Even if you can only save $5–10 per week, it matters. Put it in a separate account: big changes often fail, but small wins add up. Instead of slashing everything, choose one small daily habit to cut or swap.

Examples:

Brew coffee at home instead of buying it.
Cancel a subscription you barely use.
Meal prep lunch twice a week instead of eating out.

Cutting just $5/day = $150/month = $1,800/year. That’s money you can use for savings or debt payoff.

✅ Step 5: Create a Simple Budget Plan

Now you’re ready to put it all together. Use the 50/30/20 rule as a beginner’s guide:

50% Needs: Rent, groceries, bills
30% Wants: Entertainment, hobbies
20% Savings/Debt: Emergency fund, extra payments

If your income doesn’t stretch that far, start small. Even saving $10 a week builds the habit. Your budget doesn’t have to be perfect—it just has to be yours.

📌 Quick template:

Income: $2,000
Needs: $1,000
Wants: $600
Savings/Debt: $400

Adjust as needed. The goal is progress, not perfection.

Final Thoughts

Starting a budget when you’re broke might feel scary, but it’s actually the first step to financial freedom. By tracking your expenses, identifying your essentials, and cutting just one small habit, you’ll see changes faster than you think.

👉 Want extra help sticking to your new budget? Grab my free 7-Day Budget Reset Challenge—it’s a simple email course with daily steps to get your money on track. [Download it here].

👉 Ready to take action? Download my free Beginner Budget Worksheet and start building your money plan today.