A (Not Intimidating!) Step-by-Step Guide to Building a Personal Budget

Dr. Lakisha L. Simmons, author of "The Unlikely AchieveHer: 11 Steps to a Happy and Prosperous Life" and an associate professor of analytics at Belmont University, often finds herself advising women who wish they had started budgeting and saving years ago. "So many women come to me in their late 30s and early 40s and say, 'I just made the wrong financial decisions early, and I wish I would have known better, because now I'm in this situation where I feel stuck and I just don't know what to do, please help me.'" Dr. Simmons' mantra? "It's never too late, but the earlier you can start, the better."

Before you really dive in, make sure all your financial statements are easy to access. I'm talking bank statements, recent utility bills, W2s, paystubs, credit card bills, and whatever else that will help paint a picture of how much money you have coming in and how much money you have going out.

The first piece of information you need to figure out is how much money you take home each month. "If you're saving for your 401K and such, take your net take-home pay after taxes, and then budget off of that number," recommends Storjohann. Don't forget to include any supplementary sources of income, like if you have a side hustle or you regularly receive money from a parent. Basically, this step is all about having a super clear picture of how much money you can rely on in a given month.

While assessing your total income, take a fine-tooth comb to the terms and conditions of any loans, scholarships, or personal financial assistance. For example, if you're counting on a yearly scholarship as part of your income, you might need to maintain a certain GPA. Similarly, if a family member has offered to loan you money and you're considering that chunk of change to be part of your "income" this year, it's best to have the terms in writing so you're not caught off guard by their repayment expectations.

Okay, now you've got your income sorted out, wahoo! The next step is less fun, but super important: List all your fixed expenses AKA the things that cost about the same each month and are usually paid on a regular basis. Think: your mortgage or rent, car payments, insurance premiums, cable/internet, etc.

Your variable expenses are items that can fluctuate month-to-month, like groceries, dining out, and shopping. Of course, you gotta eat, but some months you might spend more on groceries and less on takeout or at restaurants, while other months might lean in the opposite direction. Some expenses in this category should be considered "discretionary," as in, they're not essential.

Here's the thing: Your budget will only work if you're honest with yourself. Be realistic about your spending habits, don't fudge the numbers or tell yourself "oh, that was a special occasion, that expense probably won't happen again." Life happens. Your budget is about preparing accordingly.

One misconception about budgeting is that you have to give up having fun. I promise that's not true! Especially if you identify the parts of your lifestyle you cherish and build them into your budget. Simmons suggests the following thought exercise, "When it comes to balancing, what do I truly value? Do I value time with my girlfriends? Or do I more so value time shopping? Or do I really really value Starbucks coffee? If I value time with my friends, then I'm going to make sure that in my budget, there's a line item for 'happy hour with girlfriends' twice a month."

Any budget you develop should cover all of your needs, some of your wants, and also allow you to save for emergencies and the future, according to NerdWallet. But the specific way you allot for each category can vary depending on, frankly, the way your brain works and how you prefer to stay organized.

As you're figuring out your income and your expenses, you can put it all in a spreadsheet, a tool that both Simmons and Storjohann recommend. "I use Google Sheets because you can use formulas and it automatically will let you know with a running total what you have remaining," Simmons says. She also sells budgeting spreadsheets, which allow users to plug in their income and expenses, and track their finances.

If manually updating a spreadsheet isn't something you'll do consistently (again, be honest with yourself!), apps like Personal Capital, Mint, or Albert might be more your speed. With these apps, you can hook up your bank account and credit cards so that expenses get tracked and categorized automatically.

Here's how the envelope system works: You divide your income into different spending categories, and once you've decided how much you're "allowed" to spend on each category, you literally take that amount in cash and place it in an envelope. Then, you can only spend what's in the envelope for that category's purchases. IMO, credit cards make adhering to this system somewhat tricky, but you do you.

50% of your money goes towards needs (like housing and transportation), 30% goes towards wants, and 20% is earmarked for savings and debt repayment. It's a pretty straightforward system, and the folks at NerdWallet have created a calculator to make it all the more easier to customize for your financial sitch.

You can always go the old-fashioned route and keep track of your budget in a notebook. Just be sure you schedule time to regularly update it with your latest expenses.

No matter which budgeting system you decide to use, it's imperative that you pay very close attention to where your money is going. Like, seriously, take a magnifying glass to your expenses. You might be surprised to learn how much you spend each month on discretionary items, like alcohol or coffee. (Yes, yes, I agree, it's debatable whether coffee is not essential.)

Another way to audit your expenses is to look at how much they're costing you annually. "You need to see yourself, 'wow, I spend $125 on cable—do I truly value cable that much to spend over $1000 a year on it?'" Simmons says.

Yep, here comes the hard part: Once you know your spending habits like the back of your hand, you gotta decide where you can trim. For instance, if you're spending more than you want to on gas, consider taking the bus just once or twice a week. "I always look to see: where is my money going? And where do I say my money should be going? What are my goals, and what am I actually doing? Then you really start to move money around," explains Storjohann.

If reducing expenses isn't really possible for you at the moment (it's okay!), you might want to dream up some ways to increase your take-home pay. I'm not talking about giving up your creative job to become a banker (though, I mean, if you want to, go for it!), but if you have the bandwidth to add a dog-walking shift or a babysitting gig to your plate a couple times a month, it might help balance your budget.