Here’s the deal friend…If you are looking for someone to tell you how to keep a budget to the penny, I am not your girl. I love a good budget but in my world my budget is about guidance and awareness. A few years ago I used to get upset with myself when my month-end close out did not match the plan I so neatly laid out in the beginning of the month. I now use my budget mostly as a tool for awareness of where my money goes and to keep me slightly in line.
If you’ve never made a budget before you are going to need to go back 2-3 months on your bank statements to see where your money has been going so you can determine realistic numbers. Example: You estimate you need $700 a month for groceries, but when you go back through your bank statements you discover you actually spend an average of $1,000. Give yourself a budget of $1,000. You can work on cutting back if you want or need to from here.
The first thing I do is calculate our income, since it fluctuates it makes a difference for how much “fun” I can include each month. A lower income month means less eating out and less buying clothes ;)
Then I have a list of categories that I consider “essential spending” … rent, food, personal products, utility bills, daycare, gasoline, household, medical.
Next I do my variable spending, I think of these categories to be more “things I want” in my budget… clothing, home decor, fun.
Here’s a full list of my categories and what fits into each:
Housing - rent/mortgage, repairs, home insurance
Debt - vehicles, personal loans, car loans, etc
Transportation - car maintenance and registration
Personal - hair, toiletries, makeup, nails
Dental
Diabetic care
Medical - doctor appts, eye exams, contact lens
Health - chiro, massage, gym, vitamins, therapy
Giving - gifts, donations
Home - furniture & decor
Fun - dates, books, music, family activities
Utilities - city, natural gas, verizon, netflix
Household - cleaning products, paper towels, cleaning lady
Gas - I like this separate from transportation
Investment/Savings
Clothing
Daycare
I give each category an expected number for the expense cost each month. Then throughout the month I track all of our spending, usually I do this once or twice a week. When I first started budgeting I did it daily. At the end of the month I add up each category and compare where I thought it would fall and where it actually did. Having a budget keeps me accountable, because well I am a spender.
If you find yourself to be a spender too I highly recommend you try the “cash envelope system”. Here’s a link you can follow to learn more about that. I have certain categories I take cash out for each paycheck to fill an envelope because it’s easier for me to stay in line that way. If I am out of cash, I’ll still use my card but that will tell my brain that I’m already over budget so I better be buying things I actually need. My groceries fall into this category. I also like to keep a “misc” envelope in my wallet for random things that come up.
Your budget can totally be regular notebook, on your notes app on your phone, or buy a budget planner. Previously I used The Budget Mom’s budget book, now I have switched to the Happy Planners Budget Extension pack. If I’m being honest going forward I’ll probably switch back to regular notebook paper because no one ever has the perfect layout for me, I always end up using a bit too much white out…
If you’re going to use a notebook here’s how I recommend setting it up.
1 page with your (estimated) income for each payday
1 page with all of your anticipated expenses (necessities and wants)
Set up 3 categories, one for the title, one for the amount budgeted, and one for the amount actually spent.
1+ page(s) to write down every time you spend money and what category that expense belongs in, I like to use a highlighter for each category (like The Budget Mom)
If you need help starting your budget please reach out, I’d love to offer you more insight!
Kelsey