So most people understand that in order to have a good plan when it comes to your finances, you have to start out with a budget. Some people get nervous when they hear the word “budget”and think it is the most dreadful word in the dictionary. We have come up with some good budgeting techniques that should help navigate through creating your budget so it is not overwhelming and a smooth process.

Why a budget?

So why would someone want to create a budget? This is a great question and let me explain. Simply, you need to know where your money is coming from and where the money is going too. The easy part of the budget is adding your income because most of us how much we are getting paid each paycheck. I currently get paid every two weeks, however I budget monthly. The hard part is tracking all of your expenses. You can get very overwhelmed trying to go through your bills and try to create a budget.

Do I pay for budgeting app or program?

That all depends on you. There are many programs out your that do help in creating a budget. I have used many of them; like Quicken, YNAB, Mint, just to name a few. But honestly, the best practice that has worked for my wife and I is simply using paper and writing down everything. With a family of five, we have a lot of expenses that we have to work through and it normally takes one afternoon to knock out our budget. You need to make sure that you have all your bills included in your budget to truly understand where exactly your money is going too. Again, many programs out your will help make this easier for you if you would prefer to go that route, however paper and pencil works just fine when it comes to creating a budget. There are even templates for excel on the internet that you can use for your budget. Vortex24 has some great budgeting spreadsheets that are completely FREE! Below are some good budgeting techniques to follow:

Break down your income and expenses

Break you monthly budget down through these categories:

  1. Income
  2. Non-Discretionary expenses
  3. Discretionary expenses.

Let me explain the difference between these categories.

Income: your income from your job. Start with this category.

Non-Discretionary: is expenses that is a NEED. You have to pay the rent/mortgage. You have to put gas in your car or food on your table. This category comes second.

Discretionary: is expenses more of WANT than a need. (clothing, subscriptions, phone, toys, etc.) When you work on your budget, you want to first start with the non-discretionary items before the discretionary items.

Here are some steps.

  • Start a chart and list your expenses. To the right of each topic, write down the amount.
  • Create a total line at the bottom for each category above.
  • Add up your lines to find the total cost and then subtract that total from your income.
  • If your negative, you need to cut some of your expenses. If your positive, find a place for the extra money; example mutual fund, savings, vacation fund, Christmas fund.

Below is an example of budget template. This should give you an idea on how to make your budget.

I made my budget, now what?

Once you create the budget, then you have to test it out. For a month, try to live by your budget. You will run into issues where you spent more on food that you expected, or spent more on gas. There could have been an added expense where your car broke down or you need to replace an air conditioner. These things will happen and you will have to the tweak your budget as much as possible. The first time my wife and I budgeted, we were way off on food. We thought we could get by with $200 a month for the entire family. We actually ended up with about $300 a month in food costs. But there is a catch. We were working on eating at home more than at restaurants. So we adjusted our restaurant line to fix the food costs. It takes about 3 months to tweak your budget where you find the sweet spot.


As I mentioned before, your are plenty of programs and services out your on the internet that will help you track your expenses. One that we like to use in my house is Goodbudget. Goodbudget is downloaded to our phones and we can track when either of us uses the checking account on the categories that we have set up to track. I can see when she spends money on gas, food, and restaurants. Now, my wife and I have a great relationship where we don’t need to know exactly what each other spends throughout their day, but this is a simple way were we can both work together and stay in line with our budget.


Again, budgeting is not as complicated as some people make it out to be. Simply using paper and pencil can get the job done. What really matters with a budget is that you track your expenses and you compare it with what you budgeted. Some tweaks might be needed to your budget if you are going over on your expenses than you originally plan.

Do not get into the “weeds” on your budget. (K.I.S.S) applies with budgeting. It is easy to get caught up in analyzing every single penny. This will drive you nuts and make your financial situation overwhelming; believe me I have done it! Take small steps when you are working on your budget and once you have some of your expenses under control, work on the finer details with your money. I hope this information is useful for you as you work on your financial situation. Please feel free to leave a comments below. If you have any questions, let me know. As always, stay positive and pursue your goals!



9 Responses

  1. Hey. this was very helpful. I need to try making a budget, I always seem to be running out of money before I get my next salary. Breaking down my expenses is gonna be hard I think, it’s like I have no idea where all my money goes. I hope this will make things easier for me.  Thank you so much.

    • Simon, it took me some time on the first try. I believe it took us almost two days tracking everything down. But after the first try, it was easier every-time we wanted to update our budget. Don’t worry about being perfect. In fact if is seems too much; just break it down to some categories. For example, track your food for the month. Then next month add you gas and so on. Hopefully this helps. 

  2. Hey Fred! Thanks for taking the time to teach me about budgeting without fancy apps. I’m currently in the process of learning how to budget and found your table very helpful. I do have a question though. Why would you consider clothing a discretionary expense? Don’t we all need clothes to go to places and stuff? So wouldn’t that mean its a necessity?

    • Good question! 

      I would say non-discretionary. The reason is I have clothes already. They might be worn or old; not the newest item out there. So a necessity in that we have to wear clothes, but not a necessity for new clothing. Makes sense?  

      Keep in mind: is this a WANT or a NEED?

  3. Thanks for this overview of good budgeting techniques. The sooner you get into the habit of doing a budget the better. Its very difficult to adopt this at a later stage in your life so start young.Golden rule for any budget: Money in needs to be more than money going out. 

  4. Hi Fred, this is a great article with helpful budget tips that look as though they can really make a difference. It’s funny, but usually in a marriage, there is at least one person who is good with budgeting and finances, even if the other person isn’t. In our case however, my husband and I both fall short in the budgeting department.

    Thank you for the template as this is something we will be using. I will also be doing it with just a pencil and paper. Thanks so much for sharing your knowledge and expertise. I’m sure you are helping a lot of young couples just starting out, as well as single parents, and just about everyone really. Who has money to waste? Budgeting is crucial in running any household!


    • Thanks Sue. My wife and I make a great team when it comes to our budget. When we do it separately; not so well! Thanks for comment!

  5. Hi Fred,
    What an interesting topic I found searching the internet. The importance of establishing what our budget will be. It will result from the difference between our income and expenses. 

    Regarding expenses I like to define them in fixed and variable. I think these terms say it all. If we have a limited budget as our family has often happened to us, we must act on the “variables”. Example: holidays in some years we had to shorten the days and others change the destination. 

    Life changes as our budget does not seem to you?

    Many thanks!

    • Good point. We have to adjust our budget as well. Sometimes the vacation that year might be more expensive than normal. Even if the gas prices jump up, we add more to that line just ensure that we stay within our budget. Of course our food line has been adjusted. As the kids have gotten older, my food costs has increased! So, adjusting is necessary with budgets! 

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