How to Start a Budget (Part II)

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This is the second part of the series by Joanna and Johnny who are sharing their own experiences an tools that helped them slay the Debt Monster. It is their firm belief that anyone can do it if they start with a budget.

For this post we’re getting back to basics. Today’s topic is one that many of you may already understand. While Johnny and I are fortunate enough to be out of debt, we realize debt is a reality for many. And so we’d like to share one of the tools that helped us slay the Debt Monster.

Today’s Back to Basics post is the second part of our How Budgeting Works post. Here’s a short refresher:

  • Budgets are a necessary evil. Deal with it. Just kidding (about the harsh words, not about the budgeting). And itemized budgets are the best way to have control over your saving-to-spending ratio.
  • Budgeting needs to happen in real time. You cannot keep track of it in your head through the month. If you try, you will fail. Okay, that was also a little harsh. But, really.

Getting Started

And now on to starting a budget. Johnny and I track every item, but we keep each item in a broader category to keep things easier. Our main categories are these:

  • Home/Rent (or Mortgage someday)
  • Tithing
  • Utilities
  • Food/Groceries
  • Personal
  • Everything Else

Pretty simple, right?

What you don’t see is that those main categories have lots of subcategory babies running around wreaking havoc on our budget each month. But that’s okay! The sub-category numbers can get as crazy as they want as long as the main category numbers stay on track.

I like to relate things to real life, so here comes a metaphor. You’ve been warned.

I was a restaurant server for a few years. And my main goal was to make everything appear perfect to the customers I served. Behind the doors of the kitchen, all hell could be breaking loose (and usually was). People were burning themselves on the ever-hot fajita skillet, someone was slipping on a spilled smoothie, we were low on silverware, the new guy had just sliced his hand open — you name it, it happened — but as far as the customers knew, all was well.

And that’s how your main categories should be. Even if your subcategories are spastic and refusing to stay in line, no worries as long as your main category numbers stay within budget.

Sample Categories

Here’s an example of how a main/sub relationship works for us:


  • Everything Else: $550


  • Netflix
  • Pet Supplies
  • Clothing
  • Dry Cleaning
  • Personal
  • Gas
  • Home Care
  • Entertainment
  • Medical
  • Gifts
  • Misc.
  • Baby Supplies

As long as all that stuff stays under $550, we’re good. For that particular category, we don’t have a number for any of the subcategories since they vary so much. But to be clear, we’ve estimated the expenses for all of those items. And we revisit that category every few months to make sure our total amount is still where it should be. For other categories, we do keep exact numbers for the subcategories. Here’s an example:


  • Utilities: $508


  • Electricity: $75
  • Gas/Heating: $75
  • Cell Phone: $140
  • Internet/Cable: $100
  • Water/Waste: $40
  • Auto Insurance: $78

Some of our utilities vary from month to month, and some don’t. Sometimes our electricity is less than $75 and our gas/heating is more than $75.  But as long as the total Utilities number at the end of the month is under $508, we’re happy campers.

We like this approach because it allows us to keep an itemized budget without stressing over every tiny detail. If our baby girl spits up all over our clothes every day for two months straight and we’re suddenly spending much more than anticipated in the Dry Cleaning subcategory, it’s okay. The main category is what we worry about.

Got it? Good. Still confused? Are you a visual person like I am? Then check out our April budget for a closer look.

Choosing Your Medium

Johnny and I use an app to track our spending. We always have our phones on us, so we’re able to update our budget immediately after making a purchase. And it syncs to both our phones. We use the HomeBudget app, which we love. But there are many apps out there, so find the perfect one for you.

If you do better with pen and paper, there are thousands of printable budgeting worksheets out there. Type in “Budget Worksheet” on Pinterest, and four hours later you’ll still be scrolling all the options.

A few last thoughts

The first month is a crap shoot. If it’s your first month budgeting, you’ll be doing a lot of guesstimating. Don’t you love that word? It leaves so much room for error. And there will be errors. You may think you spend less on food than you actually do (this is a common one). Or that your Starbucks habit isn’t as bad as you thought (this is a less common one). After the first month, you’ll be able to come up with better numbers for each category, so hang in there.

Each month varies. Life happens. Unexpected expenses arise. It’s okay. If your budget doesn’t work out once (or even a few times) for one reason or another, just brush yourself off and start again the next month.

Every cent should have a place. Calculate how much income you bring home any given month. If it varies from month to month, guesstimate. And then figure out how much will go to spending and to saving. And make sure you follow every cent until it finds its place of rest. Don’t leave any cents unaccounted for. It’s a dangerous world out there… I’d hate for something bad to happen to them.

Okay, I’ve started making cheesy threats. That’s my cue to wrap things up.
It doesn’t matter how you go about it. What matters is that you do it. And stick with it. When you’re thinking I hate this freaking budget. Why did I start it? (because,  if you’re anything like us, you will think that), just try to focus on those long-term goals. The first month’s the hardest. And if nothing else works, email us, and we can lament/love our budget-friendly lifestyles together.
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