Let’s not waste time right now on why you need a budget (puts you in control of your money, lets you see exactly where your money runs off to every month, etc. etc.). Instead, let’s assume you want to make a budget but aren’t sure where to begin or don’t want to spend money making it. To get your juices flowing, I’ve published our family budget to give you an example of what works for us later in this post.
Ready, Set, Go
You could also open an excel spreadsheet or a trusty notebook. Or, use a simple program like Dave Ramsey’s Lite Budget. Your first buckets for money will be something like:
- Housing (rent, mortgage payment)
- Utilities (electricity, water, gas, phone, etc.)
- Food (groceries and restaurants)
- Transportation (car payment, fuel, maintenance)
- Personal (blow money, beauty)
- Recreation (internet/cable, subscriptions, memberships, childcare, etc)
- Debts (car, student, credit cards, etc)
You can get as specific as you want.
Here’s a list of our family’s buckets and in what accounts we keep our money:
|CHECKING ACCOUNT/CASH (items below)|
|Rent (drafted automatically the 1st of the month)|
|Education Savings Accounts 22nd – details in Day 15|
|Roth IRAs 22nd – details in Day 14|
|Car Fuel – details in Day 2|
|emergency fund 1 – details in Day 12|
|New House fund 1|
|Family blow money – details in Day 19|
|Adult blow money – details in Day 19|
| Gifts/postage – details in Day 8
|Health Savings Account (HSA)/emergency fund 2 – details in Day 16|
|SAVINGS ACCOUNT (items below)|
|Vacation fund – details in Day 10|
|Car repairs/tires – details in Day 11|
|Boys’ activities – details in Day 11|
|Disability insurance (Feb) – details in Day 13|
|2013 taxes (Apr)|
|Car license/taxes (Apr/Oct)|
|Identity insurance (Jul) – details in Day 13|
|Personal articles insurance (Nov) – details in Day 13|
|Car insurance (Nov) – details in Day 13|
|Life insurance (Dec/Mar) – details in Day 13|
|Christmas (Dec) details in Day 9|
|Emergency Fund 3 – details in Day 12|
|New House Fund 2|
|child 1 Savings – details in Day 17|
|child 2 Savings – details in Day 17|
- Teal: Monthly fixed expenses – details in Day 5
- Purple: Utilities that vary each month – details in Day 6
- Red: Other variable expenses, find historical average for a starting point – details in Day 2 and 3
- Blue: Monthly contributions, depends on your upcoming events
- Orange: Annual expenses, divided into monthly ‘payments’ – details in Day 7
- Black: Our other saving buckets, added to when able/as needed
I’m sure you’ve got a lot of questions… why three Emergency Funds? What is blow money? Where are these different Accounts? Why are two months listed for car/licenses and life insurance? How could one family possibly have so many different types of insurance? (Believe me, we question its necessity and expense all the time). Stay tuned, friends. We’ll unpack our thinking behind this list soon and so much more.
Until then, get started on a list of your buckets and write down any monthly amounts for each category as well (easy one: rent/mortgage payment-should be a set figure every month). We’ll get into how to make a good estimate for each of these amounts in later posts.
When you’re ready to move on to Day 2: Gather your spending history , click here.
I’m curious, what budget categories do you have that I don’t?