5 steps to begin

1. Data Collection

Before making any plan you should learn yourself a bit: financial habits and regular, mandatory incomes/expenses.
The regular incomes (such as salary), mandatory expenses (taxes, insurance, rent) can be planned right away. However, such things as food expenses, garments might be hard to predict. Then it makes sense to track such expenses for a few months to get an idea about monthly levels of those.

2. Select Method

Most of the financial advisors suggest 3D budgeting schemas, like X:Y:Z. For instance, you can see such recommendations as 70:20:10, or 50:30:20, etc.
Such methods suggest that you allocate X% of your income to expenses, Y% - to savings, and Z% to debt. Yes, it is essential to make some savings even if you pay the debt. It's life, and many things may happen, we always should have some cash quickly available.

3. Create a Plan

When you have collected all the information regarding your incomes and expenses, you are ready to create a plan (or a budget):

• regular incomes
• mandatory expenses (such as debt, rent, insurance, taxes)
• savings
• retirement contribution
• wants (expenses that you have collected the data for)

For bank loans would be beneficial if you use a financial app that supports bank credits and can calculate the mortgage and interests.

4. Verify

 Check how your plan is going to execute. It would be great if your financial app can make a prediction based on the budget entered. Make sure your financial level is always above 0: we are not a state government that can print money in the case of shortage.

5. Execute

Live according to your budget. Record incomes and expenses in your financial app. It would be awesome if the app can alarm when you are going out of the budget.


Some apps are also able to build the budget automatically based on the past data collected. What you need is just to track your incomes and expenses for 3-4 months, and let the app build the budget for you.