The B word

We can’t chat about finances without knowing our current financial situations.  My first step in getting involved in my finances was to sit down with my husband and look over our monthly income as well as all our bills.  I encouraged my husband to set up a Mint account several years ago.  Mint is a free online budgeting software that keeps track of all our bills and spending. It is a great tool (click here for more information), but it has a few kinks. And I have a hard time fully understanding the data in Mint. So I created an excel spreadsheet to enter the data in the way that makes most sense to me.  Using that data, I updated our family expenses and budget.

Yes, I said the b word.  It’s not a glamorous idea, is it?  Maybe you think budgeting is about pinching pennies.  Or maybe you think it is too time-intensive or too restrictive.  But a budget is really just about telling YOUR money where YOU want it to go.  It puts you in control of what you’ve worked hard to obtain.

Why use a budget?

First of all, you will learn where your money is currently going.  You will see patterns by keeping track of your expenditures, figuring out where money disappears.  Sometimes we think we are doing a good job with keeping our expenses down.  But when faced with all our expenditures in one place, we realize we are spending more than we thought.  I am SO guilty of this, especially with a certain store that has a bullseye as it’s symbol as well as another store that starts with a K and rhymes with bowls.

You’ll figure out what areas need a little more attention when it comes to money.  For example, you may realize that you are spending $50 to go out to dinner every weekend.  That adds up to $2600 per year.  Little things add up quickly.  Even an extra $20 on groceries each week ads up to $1040 per year. Once you know how much money you are spending, it will be easier to see the effects of any changes you make.

Focusing on your money keeps you mindful about your spending and purchases.  The more you practice mindfulness with your finances, the more likely you will develop a healthy habit of it.  You’ll be intentional with your money, spending on what is important to you instead of letting money slip out of your bank account on inconsequential things!

How to Create a Budget

Budgets are personal.  What works for me may not work for you.  But in general, every budget requires looking at how much money is going in, how much is going out, and how much is already saved.  Feel free to create your budget, track your spending, and enter your data in whatever way makes most sense to you.  For example, I mentioned how I use Mint track we currently spend, but I don’t like to use Mint as my actual budget.  I prefer a homemade Excel doc.  You can be as detailed or as broad as you feel comfortable.  You might find that it takes you a little bit of time to discover and perfect what works for you.

My personal budget spreadsheet is set up in three sections:

  1. Money going out – what we spend & save for. Examples include monthly bills, pre-planned expenses like annual bills, Christmas, or children’s college funds.
  2. Money going in – what we earn. For us, we only consider my husband’s income since I stay home.
  3. Money we already have – savings.  This category includes what we’ve already saved for those pre-planned expenses like mentioned above as well as the balances in our investment and retirement accounts.

The goal is to have more money going in than going out to increase savings.  You want to tell each and every dollar where you want it to go and what you want it to do.

Money Going Out

This section is where we keep track of all our monthly expenses, separated into needs (like mortgage) vs wants (for example, gym membership) and static vs variable.

Static expenses are those that stay the same amount each month (like Netflix); variable expenses are those with monthly changing values (like groceries).  The static values are pretty easy to figure out if billed monthly.  If you have an expense that is billed twice a year, then take that expense and divide by six to figure out how much you should save monthly.

It may take a little work to determine how much to budget monthly for variable expenses.  For example, our utilities (gas, electric, & water) vary widely, depending on the season.  So to get a monthly average, I went back and added up all our expenses for last year and divided by 12.  In our case, we had all this information in Mint, making it easy to figure out.  However, if this is your first time making up a budget, you may need to find your old bills or track your spending for several months to come up with your budget amount.

Money going out also includes things we save for each month since I’m designating that money to a specific cause.

Money Going In

In this section, we have our household income after taxes and after retirement savings.  Our income stays the same each month, so this part is very straightforward for our personal situation.  However, if your income varies each month, this section may need a little more detail and attention.


Savings includes our current balances in our retirement accounts, college saving accounts, stock accounts, and bank accounts.  I have separate line items to allocate our money in our bank account savings.  This way I know where each dollar in our bank account is going.  Doing this keeps us from blowing our emergency savings.  And it makes sure our Christmas fund is actually there when it comes time to shop for Christmas!

How to Make Your Budget Work

Once you set up a budget, it doesn’t really mean anything until you put it to work.  How do you do that?  Three simple steps.

First, keep track of your expenses.

Again, we currently use Mint to track our expenses.  However, before Mint, we would go through each credit card and banking statement then enter the data into Excel to keep track of our spending.  That was much easier back when we were just a couple and didn’t have as many separate expenses!  Plus, back then, we needed every penny we found, and we were very careful with our money.

Our situation has changed over the years as our family has grown. We’ve had positive financial changes like increases in our income.  And we made some major changes (like moving!) that helped some expenses drop. But many expenses have increased and many more new ones showed up, mainly due to our three little roommates. But I admit, unnecessary expenses have crept into our “needs” and into what’s normal for our budget.  We want to be intentional with our finances, so this month I plan to tighten up the ship!  Let’s seal up those money leaks!

Second, stick to your budget.

If you are keeping track of your expenses regularly (daily if possible!), you’ll know when you are getting close to your budgeted amount.  Nothing will sneak up on you, and you’ll be able to adjust your spending to stay within your budget.  For example, say you have $1000 budgeted for groceries for the month.  On the 15th, you’ve spent $650.  Then you’ll know you have to get yourself in gear and focus on only spending $350 for the second half of the month.

Third, adjust your budget.

After tracking your spending for a few months, you may realize that you’ve under-budgeted an expense.  In this case, you’ll just adjust your budget to be more accurate for the following month.  Or maybe you’ll find that you over budgeted an expense, which would be a happy surprise.  Take that extra money and make it rain!  Or pay down some debt… that’s your call. 🙂  It usually takes a few months to get your budget accurate and to get in the habit of following a budget in general.

Once you’ve got budgeting down as a habit, you can start tweaking your spending.  Maybe you’ll find extra money that you didn’t know you had.  I’ve always liked numbers and games, so thinking of budgeting as a numbers game makes if fun for me.  I love the idea of being more intentional with our finances, and I’m excited to see what tweaks I can make this month that add up!


Does anyone here already use a budget?  What tools or apps do you find helpful?  I would love to hear about them in the comments!

2 thoughts on “The B word

  1. Great info & tips! I’ve never really had a budget, per se but I’ve been saving & investing more money each month. I really do need to create something where I can truly see everything going in and everything going out. Thanks for the ideas!

Leave a Reply

Your email address will not be published. Required fields are marked *