Our step by step guide to building a budget that maximizes savings so that you can save for a house!

Money can be tight sometimes. Between paying your rent, utility bills, and paying down debts, it can often feel impossible to have anything left at the end of the month to save - at least without sacrificing any glimmer of fun and entertainment you might have! Sometimes bills can pile up and expenses may feel like they are coming out of nowhere, and so many people get lost in trying to ration out their income to cover all of their financial obligations. Whether you’re a single person, a couple, or even have children, this post will be useful to help you spread out your money effectively without sacrificing your leisure and relaxation! As realtors, we understand that many people think that they can’t afford to buy property or upgrade into a nicer space, but by reconfiguring your budget, you might be surprised just how much money you can have left over!

Determine Income to Budget

How to Begin Planning Your Budget


1. Determine Your Take Home Pay

Life is not always easy, and it might feel like financial obligations and bills are swirling around your head constantly. How do you even begin planning a budget, knowing that you’ll need to sort through all of these different expenses? That is a question that a lot of people find themselves asking. Whether you’ve created a detailed line-item budget before or are new to itemizing your monthly costs, this post will help you to think through what exactly goes into your budget and how to go about creating a new one from scratch.

The first step in creating any budget is figuring how much money you actually have to spend or save. You need to determine your after tax, monthly income. If you already have a job, the easiest way to do this is to take a look at how much you get paid each paying cycle. If you get paid biweekly, double the amount you make each pay cycle. If you get paid on a weekly basis, quadruple it.

If you don’t already have a job and are looking to move to a new area or start a new position, things may seem less clear cut. After all, you haven’t seen your paycheck come in yet – how can you determine how much you’ll actually make after tax? As a rule of thumb, you should usually expect about 20% of your income to go toward taxes. This can vary greatly depending on location, as states and cities have their own tax rates and codes. Living in rural Kansas, you’ll pay much lower taxes than you will living in Manhattan. Some states, like Florida and Texas, have no state income tax at all! However, 20% is typically a good estimate for anywhere outside of the city limits of any metropolis in the United States.

My personal favorite method to determine my after tax income is Smartasset.com. They have a free income tax calculator that allows you to input your before tax income, your zip code, your tax return filing status (married, single, etc.), any retirement contributions, and how many personal tax exemptions you have. This calculator will then give you an itemized list of the taxes that will be deducted from your pay, as well as what your after tax salary will be per year. You can then divide that number by 12 months to determine your monthly take home pay, which is what you will use to build your budget.

After Tax Income Budget

2. Determine Your Preset Monthly Expenses

Now, you know how much money you have coming in every month. Where do you even begin when it comes to figuring out your expenses? Here is my method. Firstly, you need to consider the expenses that you have little to no control over. To start, think about the big, preset, recurring expenses that you pay every month. How much do you pay for rent? How much are your monthly utility bills? Do you pay monthly insurance premiums, including those for medical, dental, vision, life, car, renter’s or homeowner’s? Do you make car payments, student debt payments, or payments on any other kind of personal loan? And what about your phone, internet, and cable bills? Ironing out these items is the first step to figuring out your expenses.

Once you have hammered out each of those big items, start thinking of the smaller monthly present expenses you pay on a recurring basis. Do you have a Netflix subscription? Are you a member of any club or organization with monthly dues? Do you have a gym membership? You need to figure out what monthly subscriptions that you have and add them to the list of expenses to build into your budget.

After you have considered these preset, recurring expenses, both big and small, it is time to move onto the next step; annual preset expenses. Do you have annual credit card fees? Do you need to pay dues for a homeowner’s association (HOA)? Do you have any other kind of annual maintenance fees? Figure out all of these numbers, divide them by twelve, and add those monthly figures into the list of expenses for your budget.

 Monthly Expenses Budget Tips

3. Configure Your Flexible Monthly Expenses

Now, you have figured out all of the preset, unchanging expenses. What comes next?

It is time to consider the expenses that you have a little more control over. I like to break this section into a few categories: personal care, entertainment, groceries and living supplies, and eating out. What exactly falls under each of these categories?


Personal Care

Under the personal care category, think about money you pay each month to take care of yourself or your appearance. How many haircuts do you get, and how much do they cost? What about getting your nails done? Or on a deeper level, do you pay for any counseling or advising? These expenses are much more under your control within the budget. If money is tight, you can cut down the number of haircuts and manicures that you get. I am very particular about my hair, for example, and I tend to get a haircut every two weeks. If money gets tight, I can easily cut that down to just one per month, or maybe go every three weeks instead. This is one of the most flexible budget categories, in my opinion, but it is usually a fairly small percentage of the budget and has less impact on your overall expenses.



Whether you like sporting events, concerts, going to the movies, or investing in your hobbies, everyone deserves some entertainment. After all, you work hard for your money; shouldn’t you be able to enjoy it? You absolutely should! But this needs to be within reason, of course. While there might be a lot of great artists performing in your area this month, it might be best to pick just one – or maybe only go every other month.

The other option here is to aim for the cheaper tickets. If you are a baseball fan, for example, and your team is playing several nights each week, you might feel inclined to go to several games per month. This can definitely work! But maybe you’ll be better off opting for the $20 ticket and forgoing some concessions, if need be. Either way, this is one of the most flexible budget categories that you have, because if money is tight, you can eliminate this entire category, if needed. This one tends to be a bigger component in the budget than personal care and can have a big impact on your bottom line.


Groceries and Living Supplies

Firstly, what do I even mean by living supplies? By living supplies, I mean things that you use around the house that aren’t food, but you might grab at the grocery store while you’re there. This could be things like shampoo and toothpaste, cleaning supplies, or pet supplies, if that is relevant to you. These expenses actually add up and definitely need to be considered in any budget.

Additionally, you need to consider your groceries. While this bill does fluctuate, you can probably see that it comes out to be roughly the same every month barring those times you decided to treat yourself to a steak dinner and a bottle of wine! While this monthly expense tends to be roughly similar each month, there is certainly wiggle room with which you can save some money. Buying generic brands instead of name brands, shopping at a budget grocery store instead of Whole Foods, and avoiding luxury food items are some easy ways to cut down the grocery bill every month, and ultimately create more flex room in your budget.


Eating Out

This one is simple. Who doesn’t enjoy a nice meal out? Dining out is a great way to spend quality time with loved ones and reward yourself for all of your hard work. This category is also hard to cut from your budget, as sometimes you don’t have any choice other than eating out! This category includes more than just nice dinners out; It also includes any money you spend on your morning coffee, the quick bites you grab for lunch, or the snack you grab on your way home from work.

While eating out is practically inevitable – we can’t cook every single meal and pack every single lunch – there are still ways to minimize how much this category costs you each month. Emphasizing eating at home instead of eating out can save you hundreds of dollars per month depending on your current dining habits, and this is a lot of money at the end of the year!

 Budget Dining Out and Entertainment

4. Use Monthly Budget Leftover for Future Savings

This category is what budgeting is all about. Saving is so crucial, and the earlier you start, the better off you’ll be. If you’re looking to buy a house, you’re going to need enough saved up for a down payment, and that is not chump change! Even if you aren’t looking to buy a house at this time, saving as much as possible now will come in handy later when you do make that decision to buy your home!

When it comes to savings, it is important to set goals. What exactly do you want to save for? Do you want to buy a car? Build your emergency fund? Contribute to your retirement? Or best of all, save up to go on vacation? Whatever it is that you want to do, it is important to figure how much you need to save and set savings goals to build into your budget. For example, to save $5,000 for an emergency fund over one year, you’ll need to save a bit over $400 per month. By going out for dinner only once or twice per month, you can save a hundred or two. By cutting back on the entertainment budget you can save another couple hundred dollars. Then by cutting down on the personal care budget, you can pad that savings a little bit more!

The average down payment on a house in the United States is five or six percent, meaning that a two hundred fifty-thousand-dollar house will require about thirteen thousand dollars for a down payment. If you haven’t been saving and decide you want to buy a house, that means you might need to save several years before you can afford the down payment. This is why it is best to outline your savings goals and start saving as soon as possible, that way when you decide to make big financial decisions or get caught with a big bill like buying a new water heater, you’re prepared.

 Saving Early Helps Budget

Savings Categories to Consider

Emergency Fund

This one is extremely important. You never know what could happen, and it is best to be prepared for anything. Whether it is some sort of unexpected hospital bill, a new water heater, or a new roof, having money saved up for an emergency is extremely important and should be one of the highest priority savings categories for you. How much to save for an emergency fund is completely up to you and the cost of living where you are, but several thousand dollars is a great place to start.

Retirement Fund

So many young people neglect their retirement fund. People think that they can always start saving later and that they have plenty of time. After all, you probably will not retire for another 30 to 40 years, right? This is absolutely the wrong approach. The earlier you start saving for retirement, the more you’ll have when you retire, and even better, the earlier you’ll be able to retire! Also, if your employer offers a 401(k)-matching program, you should do the best you can to save the maximum that they will be willing to match, because whatever they match is free money!

Vacation Fund

For most people, this is a lower priority savings category, but still an important one! Vacationing can be expensive and saving up throughout the year to be able to go to the destination of your dreams can be a very rewarding and financially prudent decision. Between the costs of flights, accommodation, food, and activities, vacations are one area where people spend a big portion of their income every year. Saving up gradually throughout the year is one way to ensure you don’t overspend while on vacation.

Home Buying Fund

As realtors, we would be remiss if we excluded this category! As we mentioned before, buying a home is a very big decision and an even bigger financial commitment. Additionally, to even be able to buy a house, you will need to have saved up enough to make the down payment. Starting earlier rather than later will ensure that you are already financially ready to buy as soon as you make the decision, rather than needing to spend the next several years saving up. If you are curious about reasons to buy instead of to rent, be sure to check out our post with the top reasons that buying is better than renting in 2021!

 Start Home Buying Fund Early Prepare

Hopefully this post answered some of your questions about how to create a budget, especially as someone looking to buy a home. We at The Boyd Team are always here to help you figure out whether Myrtle Beach is your next home or not, and we are committed to helping you find the right property for your needs and dreams.


Any question that you have about moving to the area and finding your dream home by the beach is our pleasure to answer. Feel free to send us an email at eddie@boydteam.com or text or call us at (843) 222-8566, and we will get back to you as soon as we can. Being true natives of the Grand Strand and Horry County and with over 25 years of experience in the local real estate market, whether buying or selling, we can help you make your dreams a reality.  No One Knows The Grand Strand Better! Trust, Knowledge, Experience, Professionalism, You Can Count On!


Post written by Greg