How To Budget

If you’re like me, budgeting scares the living crap out of you.

Don’t think of it as a restrictive device used to squash all the life out of you, think of it more as a guide to where you want to spend your money.

Why do you need money management?

As Stay At Home Moms, it is our responsibility to ensure that our finances are in order. Since we manage the home, we need to be the ones to manage the bills, expenses, and allocation of funds.

Of course, most of this is done with our husband’s knowledge! But, if your home is anything like mine, most of the financial transactions are completed by one member of the house.

We need a budget to help us stay on track.

I will readily admit that I am the most disorganized person on the face of this earth. I have piles and boxes of papers, bags of clothes and toys I need to go through. If I did not have a budget to remind me which bills to pay when, and where my money needed to go, I would be lost!

My budgeting allows me to set aside money for savings, which is an integral part of staying a stay home mom, for giving, which is something my family and community benefits from, and for spending, while still allocating the right amounts to all of my monthly expenses.

It does not tell me where my money will be spent, instead, I chose where I want to spend, my budget simply reminds me of what I want to do.

Planning how I will spend my money really helps to ensure that I do not have too much month left at the end of my money.

When I finally can see where all my money is going, I can make changes to how I am spending.

What does a budget need to contain?

You will need to have several spending categories.

Fixed expenses, such as housing, car payments and insurance, along with variable expenses like food, gas, and entertainment.

Here are some budget categories you may have:


Primary Source of Income
Supplemental Income



–401K Plan
–Savings Accounts
–Replacement Vehicle Fund



–Federal Income Taxes
–State Income Taxes
–Social Security/Medicare/Other Payroll Taxes

Other Payroll Deductions

–Health Insurance
–Dental Insurance
–Life Insurance/etc


–Rent or Mortgage
–Renters or Home Owners Insurance
–Maintenance (including lawn care)


–Cell Phone
–Other Utilities


–Dining Out


–Dry Cleaning
–Medical Expenses
–Over the Counter and Prescription Drugs
–Pets and Pet Care
–Children’s Activities


–Automobile Insurance


–Car Loans
–Student Loans
–Credit Card Payments
–Other Personal Loans or Debt

These are, of course, just some of the expense categories you may have. Every family will have a different budget.

And every family will choose to divide that budget differently as well. Some families will find it easier to put their net income down, and not even include automatic deductions such as taxes, insurance, and 401K contributions, while other families will want to analyze each and every cent. That is totally up to you.

How much should you be spending in each category?

Again, this is a personal thing. Everyone will be different. It will depend on your family, where you live, how many people are in your home, how much you make, and what standard of living you are used to. There is no right or wrong answer. You can use this Spending Comparison Calculator from the Bureau of Labor Statistics’ Annual Consumer Expenditure Survey to see where you rank on the national average, but don’t put too much weight into what others are doing.

So how do you create a personal money plan?

The great part about it is how personal they are. You can go down to a local office supply store and buy a budget book, or you can create one on notebook paper. You can create a simple spreadsheet on Microsoft Word, or even download a free excel spreadsheet form.

If you are creating your own system, simply list, on paper or on a spreadsheet, the categories you use. Then divide your paper into days or weeks. Decide how much you need or want to spend in each category, and write that in. Then, as the month goes by, record how much money you have spent on each category on each day/week. This will show you if you are above or below what you have allocated for the month.


One of the budgeting systems I have personally used is called YNAB Personal Budget 

YNAB = You Need A Budget. Appropriate title, huh?

I use this system because it is easy to use, takes care of all the things like adding categories for me (though I can still customize them),

doesn’t have a monthly fee, encourages debt free living, and works off the month in advanced principal.

This means that the money you earn today, will be spent next month, instead of last week like most of us are used to.

The program is comprehensive, and saves me time. Plus, it keeps me organized, which in itself is a difficult task!

The Envelope System

Another system some people use is the envelope system.

A few years ago, when my husband lost his job, I used the envelope system to help us get by on a nonexistent income. If you are a spender, this might be a good idea for you.

You buy a box of envelopes, and write one of your categories on each envelope.

For example, you will have one envelope say “Rent”, one will say “Groceries”, one may say “Cat Food” or “Gasoline”, etc.

Don’t neglect the bills that you need to pay once or twice a year, like “Auto Insurance”. Essentially, each expense category you have will have a corresponding envelope.

On payday, take your paycheck out in cash. Make sure to get several $5’s and $1’s.

Divide your money into each envelope based on how much you need for each envelope, each pay period.

Let me explain.

Let’s say you get paid every other Friday. That gives you 26 paychecks a year.

Start with your big expenses

How about rent?
For simplicity’s sake, let’s say that you pay $1000 a month for rent. So $1000 x 12 months would be $12,000.

But you have 26 paydays. So, $12,000 divided by 26 = $461.54. We round up to $462. So every payday, you would put $462 into your “Rent” envelope.

How about Auto Insurance?
Let’s say that you pay $650 every 6 months for Car Insurance. So it would be $650 x 2 = $1300 a year divided by 26 checks, or $50 a paycheck. So every payday, you put $50 cash into your “Auto Insurance” envelope.

It gets more interesting after your fixed expenses are put aside. Let’s say after all your bills; savings, giving, rent, auto insurance, car payment, credit card payments, electric and cell phone bills, that you are left with $210 at the end of each paycheck.

Now you need to decide how to allocate this money into your food, entertainment, miscellaneous expenses, and gasoline envelopes.

For example purposes, let’s budget $60 into “Food”, $75 into “Gasoline”, $50 into “Entertainment” and the remaining $25 into “Misc”.

Now you go about your merry life until your next payday. You may not spend any more on any one category than what is in your envelope. You may, however, have extra left over in any given envelope to use another time.

When you work on a cash basis like this, it is much harder to overspend. It is also much less convenient, which ends up being a good thing!

Like the envelope system budget concept, but don’t like the dinosaur method of cash? Well, then you may prefer the online version of the envelope system, Mvelopes.

Online Personal Budgeting – FREE 30 day trial

This system is completely digital. It will track your finances, your net worth, will integrate your banking institutions, and will even provide bill pay for you. Sign up for their FREE 30 day trial to see if this system is right for you.

Regardless of which budgeting system you choose to implement, it is important that you do something. We all need to keep better track of our spending.

You may be surprised by just how much money is truly disposable in your home. Those vending machine snacks and gas station coffees add up fast.

Once you have done this, you can more clearly analyze where excess money is available to pay off debt or accelerate your retirement plan.

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