How to Make a Budget

I’ve been getting a lot of questions lately about how to make a budget. Friends asking us about how we budget our finances.

We wholeheartedly believe in budgeting because we want to be good stewards of what God has blessed us with in every way.

Being a good steward with your finances is a foundational biblical principle that is key to living at peace with your money!

So, you want to know how to make a budget?

How to make a budget that is simple and basic enough so you’ll KEEP at it month after month?

I used to do our budget every week. I used to have a notebook and write it all down on paper. But, honestly, that can get overwhelming very quickly.

Some people who are detailed and organized can do that but I couldn’t.

I needed something broader that was simple to manage on a busy schedule.

I’m guessing if you clicked over here from Pinterest or google or a friend shared it on facebook, you need something simple too.

Here is a simple, basic monthly budget system that is easy to maintain and very helpful in allowing you to see where your money is going.

(or a GREAT tool to help your kids learn about basic budgeting concepts!)

How to Make a Budget

I created this excel spreadsheet.

It has three very simple parts.

Expenses:

This is where you figure out how much you need to budget each month for your monthly bills. Yes, tithing and giving go right here. It is something you should automatically take out every single month. You can’t afford NOT to tithe. I promise.

How do you know what you should budget for each thing? Well, some are easy… they are the same amount each month, like a mortgage. Some are not so easy because they change from month to month. Some things you only pay every 3, 6 or 12 months. Here is what you do: the ones that change from month to month you will need to pick an average amount to budget. I’ll talk more about that in a minute. The 3 month bills like trash or water will need to be divided by 3 so you know what to save each month. The 6 month bills divide by 6. The 12 month bills divide by 12. Enter those amounts into the budget.

Savings:

This part of the budget is where you save for a vacation, doctors bills, car repairs, new shoes… things like that. Over the years I’ve saved for lots of things. This part of your budget can be as big as you want it to be. You can get as detailed as you want to get. You can add “stamps” and budget $2 a month for it. The money accumulates each month until you need to spend it. So, when your can needs an oil change, you already have $20 saved in your car repairs spot. Get your oil change and then subtract $20 from what you have saved towards car repairs.

Monthly Expenses:

This is where you write in the trip to Meijer for groceries, the trip to Walmart for socks, the McDonalds receipt for 2 ice cream cones, your morning Starbucks coffee… things like that. For this you MUST SAVE EVERY SINGLE RECEIPT!!!!! If you buy something online, you need to print that receipt. That way when it comes time to do the budget, you have all your receipts to plug into their part of the budget spreadsheet. This is also where you can record withdrawing cash from your account. If you go to the ATM and get $20, record it here.

Banking your money from the month before:

In the below picture, you can see that I budgeted $100.00 for the electric bill. Well, the bill arrived and it was only $70.00! Woo hoo! Can I just go to the mall and spend that extra $30? Well, I could… but the whole point of this budget is to SAVE. So, in the next column you’ll see that I entered $30.00. Slowly, over the months when your bill is lower than your budgeted amount, you will accumulate a savings for your electric bill. This comes in handy when your bill starts to be MORE than your budgeted amount. You use your saved electric bill money to pay the extra and it doesn’t hurt your monthly budget one bit.

That, my friends, is the beauty of budgeting. The money is there when you need it.

Where the tab says “Monthly”, you can change to this months name. Then, for the next month, just copy the tab and name it for the next month. By the end of the year, you will have a tab for each month!

Now, do you see where it says $2,819.74?

Well, as you start plugging in your numbers, that number will obviously go down. But, that spot of the budget is where you will know whether you are in the red or in the black for the month.

The spreadsheet will automatically deduct your budget expenses, your savings and your monthly receipts from your total income, giving you how much money you have left at the end of the month.

The goal is to have something left. Even $5. Something to save. Add that amount into your banked savings each month and watch it grow!

You may also need to add cells to the columns to accommodate your personal budget.

Extras

How do we handle credit cards?

For us, our credit cards work like a checking account. When I spend something on the card, that amount gets pulled out of our budget just like cash. That way, when my credit card bill comes, I already have the amount I need in my account. We pay off our credit cards every single month. If you have credit card debt already, start saving to pay them off. Add it right into your budget. If you can stop using your cards, do that. Go cash only for awhile and see how you do. If you have to use your card, be diligent about deducting all of your receipts from your monthly budget so that from this point you are using it only if you have the cash in the bank to do so.

How do you get started? How to make a budget just for you?

Well, just jump in. Grab your bills, your receipts and start plugging in some numbers.

You might be in the red for a few months until you get the hang of your spending.

That’s ok… eventually, you will learn to spend within the amount of money you make each month.

A few other tips:

Balance your checkbook often – even if you just check your account online

Check your receipts against your credit card bills

Read your monthly bills

Why? You would be amazed at how often things are posted WRONG to your accounts! This costs you money. Be proactive at catching these things and calling the store or the bank or the credit card company about them!

Remember, this spreadsheet is VERY simple. But the process is incredibly rewarding!

FREE for YOU!

Basic Budget Spreadsheet

**be sure to DOWNLOAD your own copy for Excel or Numbers

{or create a copy for google sheets use online} and then edit as needed!

OTHER RESOURCES:

Budget planners

Envelope System Envelopes

Mint.com

Accordion Folder for Organizing Each Month

TinyScan App

Family Travel on a Budget

You can learn how to make a budget that is simple and works with YOUR life.

I promise.

I’d love to hear how this helps you or if you have any other tips to share!