Help Me Make A Budget

If you are considering a move to a more simple minimalist lifestyle then one of the most important steps is to figure out how to make a budget.

Choosing voluntary simplicity and minimalist living certainly may mean downsizing and paring down your possessions, but for a lot of us it certainly will also mean taking a long hard look at household finances and the level of debt you are carrying.

What Is A Budget?

Simply put a budget is the tracking of all money coming in versus all money going out. I would say that is does not take a rocket scientist to figure out that you need more coming in than leaving but that does not seem to be the case in a lot of households.

Why do we seem so reluctant to actually sit down with a sheet of paper and look t how to make a budget? I suspect that a lot of people are scared of what the results will be. I mean here you are in your 40’s or 50’s and you still have a pile of debt and not a lot of net worth.

Well yes that may be the case. But now you are committed to taking responsibilty for your actions. You know that in order to get on track with a more simple, sustainable and happy life this is the step that must be taken. It is not really simple. It takes discipline and it can be time consuming hard work. But you are going to do it.

How to Budget

The first thing that needs to happen is that you need to track your household spending for a full month. Every receipt must be kept and put in a zip lock bag or pouch. Write down every purchase in a small notepad.

Add up your expenditures at the end of every day. This will be very eye opening for a lot of people. A lot of you have no idea that you are spending 20 or 30 or 40 dollars a day on stuff. This will help you see it.

You probably have fixed expenses like housing costs and utilities so make sure that these expenses get factored in at the end of each month as well.

It should be fairly easy to come up with how much money is coming into your household. Get out your pay stubs or look online for the direct deposit information.

At the end of the month you subtract your total expenditures from your total income.

You should have a few pennies left over. This is a surplus. Good job.

What’s that? You don’t have money left over? Uh oh. This is a deficit. Now don’t panic. You are not alone, but you are now aware of the situation and now you can take a look at the areas where you spend the most money and see where you can start cutting back.

Again, I know that this is going seem like hard work, but it learning how to make a budget must be done to get on track with your new simple, minimalist living plan.

So what have I missed?

How does your household budget look?

Please share this post and please comment any thoughts you have. Thanks very much.

“Live Simply”

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12 thoughts on “How To Make A Budget

  1. I’ve started the fluid budgeting process recently and I love it. The freedom that it gives me knowing that our finances are in good shape and in case something happens, all of our bills are paid for at least three months. I would suggest that you open all your credit card statements (or find out how much you owe) and begin a filing system. Your budget goes hand in hand with your paperwork and debt.

    Thanks for another insightful post! 🙂

  2. I attended a smart women finish rich class. It was great! It was all about spending your money on your values. It is amazing how much money we spend on things we don’t value.
    Keep up the good work on this blog. I enjoy reading it!

  3. My budget is pretty simple. I have three bills now: rent (includes utilities), my internet provider, and a $10 a month phone bill (which I pay in full for the year each January). After that I have my savings and factor in any expenses such as family birthdays. and allow a small amount for discretionary spending for the week. If I run out of that I am “broke” for the week. Works for me.

  4. I just started doing this and found out something really terrifying: I alone was the cause of 75% of the expenses in our household. Given, about 15% of that is my medical bills, but that’s still 65%. I’ve slowly started to budget. Right now I’m just trying to figure out what I’m spending money on and working on seeing an overall decrease in my monthly expenditures. You’re absolutely right. It’s easy to fritter away $20 or $40 a day and not even realize it and writing down everything is the only way to figure it out!

  5. Oh budgeting! I have a degree in government…so if I run a deficient it’s not a problem–I can print more! : ) But in all reality, a budget can actually ticket to see the dancing monkeys–just check your budget! One tip I would add, is to remember to budget in those annual costs into your monthly budget–for example; we put aside $75 a month to pay for our car insurance when the bill comes due. No surprises that way!

    Also–check out It’s a budgeting software–and it’s free. What’s not to love about free!

    Thanks for this post and spreading the importance of budgeting!

  6. I discovered a spreadsheet on my mobile phone (simple one) so last month I started noting down everything I spend money on. It was most revealing. Now, I need some will power to cut down where I can see the money going (unnecessarily). Very worthwhile exercise, anyway.

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