How to Create a Personal Budget Step by Step

Before planning expenses, you need to know exactly how much comes in per month:

• •Net salary (after taxes and deductions)
• •Extra income (freelance, bonuses, dividends)
• •Passive income (rentals, investments)

Tip: If your income varies, use the average of the last 6 months. In above-average months, save the surplus.

Fixed expenses are predictable and recurring: - Rent/mortgage, condo fees, property tax - Health insurance, insurance - Internet, phone, streaming - Installments and financing

Variable expenses change month to month: - Food, transport, leisure - Shopping, gifts, personal care

Use PaxMoney's history to calculate the average of the last 3 months in each variable category.

With income and expenses mapped, define:

• •Savings goal: How much do you want to save/invest? (minimum 10-20% of income)
• •Category limits: Based on history, set caps for each area
• •Emergency fund: Reserve for unexpected costs (ideal: 3-6 months of expenses)

Income - Fixed expenses - Savings goal = Budget for variable expenses

Distribute this amount among variable categories according to your priorities.

The budget isn't static — it evolves with you:

• •Weekly: Check if you're within limits (2 minutes in PaxMoney)
• •Monthly: Compare planned vs actual and adjust limits
• •Quarterly: Review goals and methods

PaxMoney shows trend charts automatically, making it easy to identify categories that need adjustment.

Don't expect perfection in the first months. It takes 2-3 months to calibrate a realistic budget.