Opera and Cowboy boots

When it come to making a budget some people automatically think, “Boring” or “I don’t have the time to budget”. While making a budget isn’t a night out on the town for most, it is essential when trying to get out of debt.  AND staying out of debt. The best part? It really is simple to start making a budget.


Write it down:

When it comes time to write out our budget for the month write it down on paper. Why?

  1. Actually seeing where you are putting your money by writing it down can be eye opening. Writing out our first budget helped us realize how much we were spending. Once we could see where our money was going we could make the changes needed to get our money under control. Deciding where your money is going instead just wondering where it went is a huge step in getting control of your money.
  2. Just starting out with a budget? If you are trying to learn the ins and outs of budgeting while having to constantly fidget with a software program is going to add to the stress of having a budget. This is going to cause you to want to stop taking control of your money and give up before you have even started.
  3. Something physical, like paper, that can sit anywhere you can see it on a daily basis helps to keep that idea in your head. A software program that is on your phone/tablet/computer is closed unless you open it. And with how busy you are, chances are it is going to be something you don’t think about very often, because YOU DON’T SEE IT! The more you see it, the more you are going to remember it.
  4. The last reason to write it down? So you can easily make changes. Crossing out or erasing something you have already written helps make those changes you need to make so much easier. And you are going to make mistakes or are going to need to make changes while making a budget. Everyone does, especially when starting out so it is nice to be able to make changes quickly.

You can use of plain lined notebook and a pen, a planner, or even a fancy notebook if you want.

Determine your monthly income

On the top of your paper, write down the amount of income that you are going to be bringing in for the month. Not, what you are going to be bringing home after you have paid some bill, the entire amount you are going to be bringing home. This is any money from your regular employer plus and extra you might have coming in during the month.

Some of you might have an irregular income. If you do write down the minimum that you will be bringing home and start with that number. As addition income comes in during that month, sold something, child minding, extra jobs that bring in money,  write it in to the budget.

Write out your budget

Now that we have the number for our budget, list the items that are going to be part of your budget. Things like:

Housing, Insurance, food, credit cards, tuition, car payments, toiletries, gas money, clothing, babysitting, savings, etc. Anything that is going to cost you money write it down.

If you have a bi-monthly pay check this can be done into two different list. The first check of the month pays the bills that are due first. The second paycheck of the month goes to the second set of bills that are due.

Use a calendar to help you budget

Looking at a calendar helps to remind you when bills are due. It can also help with reminding you of the extra bills you might have that month.

For example, in June we had a wedding, a family trip, scout camp and gymnastics camp and branding. All of those things are not normal for our monthly budget and are going to have to added to the monthly budget. This means that I am going to need to adjust other categories to make sure those cost are covered. For example: Our food budget goes up in June so our entertainment budget goes way down. Depressingly down when you think of all the movies that comes out in the summer.

A calendar helps to show me where I am going to need to adjust my budget. It can also help me get started on the next month. Knowing that I will have bills to pay month to month can be written out in advance so they are not a huge surprise.

Find areas that you could be spending less in to get more from your budget

Now that the money is assigned to categories and you know where it is going, it’s time to figure out where we can trim spending.

Things like your mortgage/rent, insurance, car payments are usually fixed in stone. They most likely are not going to be changing and are going to be hard to squeeze any extra money out of. Things like groceries, entertainment, travel, clothing are things you can try and whittle down as far as you can to help pay down your bills faster. (Notice I did not say find a way to spend less in some areas so you spend it somewhere else. The idea is to get out of debt not spend grocery money on new shoes. No matter how many times I have wanted to.)

Does staying in and watching a movie at home help to save money rather than going to the movies? Yes. Does cooking an extra meal or two at home help to lower your eating out bill? Yes. While it may seen limiting, once you start giving up a few extra meals out you will be shocked at how much debt you are able to pay down.


To recap

  1. Write your budget down.
  2. Include all sources of income.
  3. Write out your expenses for the month.
  4. Add in extra activities that need to be added to your budget.
  5. Find ways to cut down on spending so you can add that money to your debt payoff.

Like I said at the start, a budget isn’t the most exciting thing that you will ever do but it is one of the most important! Just take a deep breath and realize it will take time to get use to a new habit. But in the end it will be worth it!