5 STEPS TO LEARN HOW TO
BUDGET

Learn how to set a budget to reach your goals

Having a budget helps you understand where your money goes and can help you reach your financial goals. Learn how to budget with these 5 steps—and then keep it going every month.

STEP 1: FIND YOUR “WHY”
It’s important to know what you’re saving for, whether it’s a new laptop, an outfit, or paying for college.

You need to define your goals. Whether it's buying a laptop, paying for college, or saving up for a new outfit, it's important to know what you're saving for.


DID YOU KNOW?

The average cost per year for a public 4-year in-state college was $27,330 in 2021-2022.1

STEP 2: NOTE YOUR MONTHLY INCOME
To start, add up all your sources of income, including from paychecks and any other money you have coming in.

Figure out how much you make each month by adding up all your sources of income (paychecks and any other money you have coming in).

If your income varies from month to month, base your budget on a month with a lower income.

Taxes are usually deducted before you get your pay. Don’t forget to set money aside to pay taxes if you are paid in cash.

STEP 3: LIST YOUR MONTHLY EXPENSES
List out all of your expenses. This includes everything from gas to coffee and snacks.

Look through your previous bank statements to figure out your expenses. Your budget will only be helpful if it’s accurate, so make sure to include everything from coffee and snacks to clothing.

DID YOU KNOW?

Americans who make coffee at home rather than buying it at a shop save around $427 per year on average. Is that something you’d be willing to compromise on to save some cash?²

STEP 4: PRIORITIZE WHAT’S IMPORTANT TO YOU
Prioritize what’s important for you now, in the future, and what you could possibly need to pay for

Consider budgeting money for:

  • Current You: snacks, clothes, personal care
  • Future You: new car, new laptop, spending money for college
  • Possible You: car repair, phone replacement, medical expenses

DID YOU KNOW?

Statistically, 5,671 phone screens are broken every hour—that’s nearly 2 per second!³

STEP 5: KEEP AT IT!
Celebrate the wins and keep at it. Budgeting is a marathon, not a sprint, so set milestones.

Consistency is key when it comes to budgeting.

Don't forget to celebrate your win. Whenever you hit a milestone, grab yourself a little treat. Just make sure you budget for it!

Help your teen learn about money


The Fidelity Youth® Account gives teens the power to save, spend, and invest their money.