Basic budgeting for the busy mom shows you how to create a budget in about 15 minutes and just six simple steps. Put your money to work the way you want to!
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I know what you’re thinking…budgeting? Who has time for budgeting when you are a busy mom? Well, in my many years of doing a monthly budget, I’ve streamlined the process a bit so it can be done in about 15 minutes or less and in just 6 simple steps. And when you take the time to be intentional with your finances at the beginning of the month, you will actually save yourself time (and a lot of stress!) later on. Here we’ll look at my easy process of how to create a budget in 6 simple steps.
One of the keys to my husband and I being able to pay off over $130,000 of debt so far has absolutely been our monthly budget. Sitting down together to communicate about our goals, income, and expenses every month allowed us to be realistic, cheer each other on, and accomplish the seemingly impossible.
Regardless of whether you have a large or small income, a lot of debt or none at all, a budget is key to ensuring you can win with your money. You will be able to save more, give more, better enjoy your spending, and just do more with what you have when you incorporate the monthly practice of budgeting into your routine.
But let’s be real–many people dread even thinking about how to make a personal a budget. Maybe they have had budgets fail in the past. Some people think a budget is stifling and robs them of freedom. Oh, how wrong! A budget actually does just the opposite–a budget GIVES you freedom! I am a HUGE fan of the zero-based budgeting method, which is what we will discuss here.
Budgeting Brings Freedom
You see, the basic premise of a budget is that you sit down, look at your income, look at your expenses, and choose exactly what you are going to do with every dollar of your income. You get to choose! You can plan to give, save, and spend according to your priorities, desires, and unique situation. You just don’t want any money “floating around” unassigned, because it will disappear and you will get to the end of the month and think, “Where did all of my money go?” When you create a budget plan, you know where your money is going.
Don’t view a budget as a restrictive tool that tells you what to do with your money. Think of it instead as a liberating tool that you use to tell your money what to do!
A budget is freeing because it gives you the license to put your money to work. If you budget money for clothes, you can buy that perfect pair of jeans without worrying if you’ll be able to pay your electric bill later in the month. Because you budgeted! If you want to set aside some money for giving, then when you see a need, you can help out without wondering whether or not you can afford it. Because you budgeted! See how nice that is?
The other great thing about budgeting is that it helps to reduce waste in your finances. When you first sit down and look at what you’ve been spending, it can be alarming. Without a budget, it is easy to spend and spend without really keeping track.
A budget forces you to look at what you are spending where. Once you know that information, you can tweak different budget categories according to your priorities.
With a budget, you can plan for certain expenses and savings goals by setting aside money each month in order to reach that goal. I hope by now you are seeing that a budget isn’t designed to be restrictive, just intentional. With that in mind, let’s look at some tips for how to create a monthly budget.
Involve your spouse.
If you are married and have combined your finances, then you should create your budget with your spouse every month. The reason for this is because there are two people invested in the household finances. There are also likely two people doing some of the spending. Communicating about finances and your long-term financial goals as well as your goals for the month puts everyone on the same page.
Most relationships involve a saver and a spender, and most relationships involve someone who is more “financially-minded.” That’s ok! That is even more reason to communicate and do this process together. Plus, it provides accountability when sticking to the budget, and it puts you both on the same team. Money problems are one of the top contributors to relationship issues, so working together on your finances can help to eliminate fights about money and ensure you are both on the same team.
Use a system that makes sense for you.
I tend to find that an old-fashioned paper and pencil budget works best for those who are just getting started with budgeting, so if you are new to budgeting (or if your budgets haven’t worked well in the past), I definitely recommend that you start out this way. Being able to visualize everything on the page is helpful, and using a pencil will allow you to make changes and tweak things along the way. I’ve created a FREE Monthly Budget Printable just for this purpose! For years, my husband and I used a cash envelope budget system, which was hugely foundational to how we view and handle money. I highly recommend starting out that way.
- Once you get the hang of the paper and pencil method, usually after a few months, feel free to convert to an electronic budgeting software or smart phone app. You can read my post about budgeting with Every Dollar once you get to that point.
Expect there to be a learning curve.
Your first month’s budget probably won’t turn out perfectly. You will likely go over budget in some categories and under budget in others. That’s ok! The important thing is that you are taking a step in the right direction. Next month, you will know better what amounts to budget for those categories. Usually after 3 months or so, the dust settles and you have a good idea of how much you should budget for each category.
6 Basic Budgeting Steps
When you are actually ready to sit down and do your budget, follow these simple steps.
1. Determine what your household income will be for the month.
If you work in a salaried position, this will be easy to determine. If you work in an hourly or commission based position, you will have to estimate what your income will be. I recommend that you err on the lower side of this estimate, and if you end up earning more, you can tweak your budget later. Write your income at the top of your budget in the “Anticipated Income” section of your FREE Monthly Budget Printable that I created. This is your starting point for what you have to work with.
2. Gather your bills for the month.
This includes utility bills, credit card statements, medical bills, student loans, and any other statements. You will need to add these amounts in as you move through your budget. You can read more about organizing your bills here.
3. Look at the calendar.
Determine if there are any big events coming up for the month. Are there birthdays or holidays? Vacations? Sports tournaments? Look for anything unusual that you might need to account for in your budget. Also consider any irregular expenses that may be due during this month. This could include memberships that are renewed annually, insurance premiums that you pay every six months or annually, automobile registration fees, and so on.
4. Start at the top of the budget form and work your way down.
Plan an amount for every line item of the Monthly Budget Printable that applies to you and your family. The line items are organized by “order of importance.” You’ll notice that giving and saving categories are at the top, because those things should be done FIRST. If you save those until the end of your budget, you will never get around to setting money aside for either of them. Even if you can only afford very modest giving and savings amounts, go ahead and put something in. Creating the habit of giving and saving is very important.
Next you will see housing expenses, followed by food, transportation, and clothing categories. These are the most important categories on your budget, because it is obviously important that you have shelter, food, something to wear, and a way to get to work. Continue moving down the budget form, adding in what you think you will need to spend in each category.
You’ll notice that debt is near the end of the budget form. If you have debt, I certainly want you to have a plan to get out of debt as quickly as possible. However, making a credit card or student loan payment is NOT as important as making sure you have paid your housing, food, and transportation expenses.
This category list is pretty exhaustive, and hopefully will prevent you from forgetting any necessary expenses.
5. Total each page.
Grab a calculator and add up the amounts you budgeted, writing the total for each page at the bottom. At the very bottom of the second page, you will see the formula for zeroing out your budget. Plug in the numbers for your anticipated income, the total from page one, and the total from page 2. Subtract your expenses from your income. Your goal is for this number to be zero.
6. Zero it out.
If your calculation results in a positive number, then you have more income that you need to put into categories. That’s great! But don’t just leave it at that. The goal here is to actually put every dollar of your income into a category. You can allocate this additional income according to your priorities: debt, savings, giving, or spending. So go back to the line item categories and decide where you want to put the rest of your income.
If your calculation results in a negative number, then you have budgeted to spend more than your income will be. In this case, you will need to go back and trim some budget areas. You can only spend what you have, so look at your categories and see where you can realistically make adjustments.
You Did It!
That’s it! You did it! Now you know how to create a budget, and now you can use it! As you go through the month, you can refer to your budget as you spend money.
Throughout the month, you can write in how much you actually spent in each category. If you go over in one category, you will need to try to go under in another category.
Don’t be alarmed if some of your numbers are “off” this first month. Don’t give up! I recommend sticking with the process for at least three months to see progress. After this first month, you’ll realize what numbers to tweak next month. You’ll get the hang of it! 🙂
Do you create a monthly budget? What tips do you have for others?