Practical ExampleModule 3 of 6
Maya's first budget
Maya just started her first full-time job. Her take-home pay is $2,800 a month. Here's how she built her first budget.
Step 1: List her needs
| Need | Monthly amount |
|---|---|
| Rent (shared apartment) | $1,100 |
| Groceries | $320 |
| Transit pass | $120 |
| Phone plan | $40 |
| Tenant insurance | $20 |
| Total needs | $1,600 |
Her needs come to $1,600, which is 57% of her income. That's above the 50% guideline, so she decides to keep savings at 20% and spend a little less on wants.
Step 2: Plan her wants and savings
| Category | Monthly amount |
|---|---|
| Eating out and coffee | $220 |
| Entertainment | $150 |
| Streaming and apps | $30 |
| Shopping | $160 |
| Gifts and other | $80 |
| Total wants (23%) | $640 |
| Emergency fund | $360 |
| Extra student loan payment | $200 |
| Total savings and debt (20%) | $560 |
$1,600 + $640 + $560 = $2,800. Every dollar has a job, so this is a zero-based budget.
Step 3: Compare the plan with reality
At the end of the month, Maya compared her plan with her bank statement:
| Category | Planned | Actual | Difference |
|---|---|---|---|
| Groceries | $320 | $345 | −$25 |
| Eating out and coffee | $220 | $310 | −$90 |
| Entertainment | $150 | $135 | +$15 |
| Shopping | $160 | $120 | +$40 |
| Net difference | −$60 |
She overspent by $60 overall, mostly on eating out, so she moved $60 less into her emergency fund that month. For next month, she raises eating out to $260 and lowers shopping to $120, which is closer to how she really spends. A budget gets more accurate every month you use it.