How do I build a realistic monthly budget from scratch?

Start by tracking your actual income after taxes, then list every expense you had over the last 2-3 months by reviewing bank and credit card statements. Group them into fixed expenses (rent, car payment, insurance) and variable ones (groceries, dining, entertainment). This gives you a realistic baseline rather than guesses. From there, assign dollar amounts to each category and make sure your total spending is less than your income. Prioritize essentials first, then savings, then discretionary spending. A common starting framework is 50% needs, 20% savings, 30% wants, but adjust based on your actual situation. Revisit the budget after the first month since reality rarely matches the first draft, and refine from there.