Having a family budget has been a crucial part of being a team and staying out of debt. It is simple to create a budget and something that is unique for each person. Follow along to learn how to create your own personal budget!
My husband and I have been married for 6 years this Summer. It is crazy looking back and seeing how far we have come since and grown as a team. One of the ways I have seen us grow is through teamwork and communication with our budget.
For a time, my family was living on a low budget. That season of life made us creative and strong in our marriage. Having taken Dave Ramsey’s Financial Peace University course, we were given the tools to be successful early on in our marriage. I would recommend this course for everyone, even if you don’t utilize all of the strategies that he recommends. The course helps you think through things that you may not have thought of otherwise, and work as a team to find out goals and how to reach them.
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What is a budget exactly?
A budget is a way to see where your money is going and control where every dollar goes. Having a budget is helpful for many reasons, including getting out of debt. A budget can be done on a spreadsheet or just pencil and paper. I, personally like the pencil and paper approach. Seeing and feeling the paper and being able to manually adjust it is helpful for me. You can decide what you prefer. By the way, budgets are not just for couples, it is for individuals as well. We all have costs of living and it’s important to see our income and where every dollar is going every month.
Line items to include for most budgets
When creating a budget there are some costs that almost everyone has. Here is a list of some main line items that will be included for most.
- Rent/Mortgage payment
- Water
- Sewer
- Trash
- Insurance
- Power
- Gas for the home
- Internet
- Gas for the car
- Grocery
- Household
- Savings or Emergency
- Any other monthly bills
Additional line items that may be included
It is important to think of every little thing that is a cost every month. Here are some potential additions that you will need to add to your budget, if applicable. You may, of course, have others that are not included in this list. This list is just to give you some considerations for other monthly costs.
- Pet food
- Backup storage for a computer or phone
- Vitamins/healthcare needs
- Doctor visit copays
- Tithe to a church
- Clothing and shoe fund
Line items to add to the budget to help you stay out of debt
It is important to give yourself some wiggle room with some things. We need socialization, therefore, there will be times you may want to do something special so you’ll need to plan money for that. Here are some additional line items to think about adding to your monthly budget.
- Extra- This would account for any potential birthday gift needs or outings that may come up for you
- Fun money- My husband and I give ourselves a little money every month on the budget to spend on whatever we desire. This way we don’t feel so restricted with money and it’s still accounted for on the budget.
- Amazon Prime and any other extra streaming services
- Meat fund- We save up monthly to buy meat in bulk a couple times of year. This is a great way to save money and get a better quality product.
- Car fund- Having a fund for things like auto repairs and oil changes are smart because they are not monthly but you need to have the money when things come up that aren’t an emergency.
- Family fund- We plan a certain amount of money to save back monthly for our children. Once they are a little older, this will be chore money that they can earn.
What we use cash for monthly to keep us on budget
There are certain things we took from the Financial Peace University course that work well for us. One of those things is pulling out cash for things so we do not over spend. Some months there are additional things we add to the cash section of our budget. For example, we are finishing up our garden build. The months leading up to the project, we withdrew a certain amount every month to save back for it. When the time came to start the project, we already had all the money we needed for the supplies set aside in an envelope.
Here is a list of the things, on our personal budget, that we typically pull out cash for each month to purchase or save up for.
- Grocery
- Meat
- Kids fund
- Date night
- Household needs
- Fun money
- Extra cushion
Creating your budget step-by-step
Here is a step-by-step process that will get you thinking through creating your perfect, personalized budget. The photo below is an example of what a typical month looks like on our personal, pencil and paper budget. I do recommend using pencil, as changes will come up during the month at time and the budget will need adjusted accordingly. An example of a change would be, if a bill amount changes from what you expected.
- Begin by writing down all of the monthly bills that happen monthly no matter what.
- Add in line items that are costs but not necessarily bills, such as gas for your vehicle for the month, or food for your pet.
- Add any saving type line items to the budget. This may include an auto repair savings envelope or general savings account. We are currently saving up money to pay for the home birth of baby number 3 this year, so that is something extra we have added to the budget right now.
- Check and recheck your list. It’s easy to miss the small things, such as a $3 bill for a monthly app on your phone.
- If you are married or have a partner, sit down together to look over the budget and be sure nothing needs to change. One of you may remember an expense for that month that the other forgot about.
Optional step
- This las step is optional but I find it helpful. On the bottom of your budget you can create line items for what is coming out each week or with each paycheck. We do this to be sure that each paychecks income doesn’t get over-budgeted and also to save back after each paycheck. That way, money isn’t just sitting in our bank account with no where to go and may get used up without a plan.
Helpful tips for budgeting
- Get any bills you can on what is called, “level pay” or “budget pay. This allows your bill to be the same amount every month so that you know what to expect. You will need to be living at your residence for 6 months before the utility company will allow you to enroll in this feature.
- Plan your budget, at least partially, one month in advance. Doing so will help you to remember upcoming events that need to be saved up for.
- Be flexible and keep your goals in mind. This way you can be practical on what it’s going to take to reach your goals long-term.
- If you have a partner or spouse, have one person be in charge of writing out the budget and the other look it over and make any changes. This allows each person to be involved and knowing what all is going in and out of the budget each month, keeping one another accountable. For our household, I generally propose the budget. I then sit down with my husband, present it to him, and ask if there are any additions or changes that he sees need made for that month.
- If using the pencil and paper method, keep a notebook specifically for budgeting. This way you can look backward and forward between months easily and recount where your money went or is going.
Leave a comment with som other possible monthly budget additions!
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