Decide what the record covers
A bank statement is a list of account movements. A budget is an interpretation of what those movements were for. Before adding categories, choose the accounts and dates you will include. A calendar month is convenient, but it must include purchases on a card as well as payments from the main bank account. Otherwise the plan can appear cheaper simply because some spending happened elsewhere.
Export transactions or work from statements. Keep an untouched copy so that a mistaken edit can be reversed. Give each entry a date, amount, description and category. Add a short note when the merchant name does not explain the purchase. A supermarket transaction might include food, cleaning products and a birthday present; split it only if that distinction will change a decision.
Clean the total before judging it
Imagine a hypothetical record showing 1,200 of purchases, a 300 transfer to savings and a 400 payment to a credit card. If the card purchases are already included in the 1,200, adding every outgoing produces a misleading spending total of 1,900. The savings transfer and card settlement need separate treatment. They affect the account balance, but they are not another purchase of goods or services.
Check refunds, cash withdrawals and shared expenses next. A cash withdrawal is not evidence that all the cash was spent that day. A refund can reduce the original category, with a note linking it to the purchase. For shared expenses, distinguish the full amount paid from your final share and any reimbursement still outstanding.
Build the next month from this one
Group the cleaned purchases into amounts that repeat, amounts that vary and exceptional costs. A one-off repair should remain visible without becoming an automatic monthly assumption. Conversely, an annual bill absent from this month's statement still belongs in the wider plan.
Suppose ordinary transport was 90 but a temporary journey added 45. A forecast of 135 may be appropriate while that journey continues; it need not become permanent. Write the reason beside the forecast so that the next review can check it.
Consumer.gov describes budgeting as a recurring process of planning and comparing spending. In this version, the comparison has two columns: actual transactions and next month's expectation. Change the expectation because you can explain a difference, rather than forcing the actual figures to resemble a preferred target.
