Starting a Budget

Updated on June 21, 2010
M.J. asks from Downers Grove, IL
13 answers

Hello! I'm a sahm whose looking for some good suggestions on how to do a budget for our household. My husband makes decent money so we are spending freely while managing to save a little each month. We're hoping to start trying for a second baby soon so I'm thinking this would be a good time to start a budget. I'm probably making it more difficult then it really is but I'm sitting here going thru all of July's receipts trying to organize them into columns such as gas, food, eating out, medical, cleaning ... but going thru my Target and Walmart receipts are giving me a headache and I'm trying to figure out tax ... AHHHH!!! Like I said I'm making this more difficult then it needs to be and I welcome any ideas or suggestions!!!

Thank You!!

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answers from Springfield on

Dave Ramsey is the best!!! I don't know if you have heard about this guy...he has a thing called Financial helps people get out of debt, budget, etc. We didn't need to get out of debt, but like you we needed to learn to budget.
The website is
He has some great tools as well on this website. Hope this helps!


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answers from Chicago on

I found it easier to organize by using Quicken.
Use your debit card or check book to pay for almost every thing. Use a credit card to pay for your gas but the next month paid it off as soon as you get the bill. This will help you keep what you are spending in car/truck gas in one category in your quicken account plus if you get the right gas card some offer credits towards free gas.
Each week you enter all your expenditures and credits into quicken. You set up categories to put your expenditures and credits in. Later you can come back and see how much you spent at Walmart, or for the electric bills, etc. This also helps you keep your check book always balanced. Each category can be printed out, if necessary, for tax purposes.
After a couple months look over how much you are spending in each category. You will then decide where you need to cut the fat. Where you are spending to much and you will know if you can start putting more away for college or retirement.

You can view how Quicken works on line.

Hope this helps you.




answers from Peoria on

Have you heard of Dave Ramsey? He is a financial advice guru that has a christian base to his savings and getting out of debt plans. Go to:
You'll be amazed at how easy his plan is to get out of debt and begin saving/budgeting. I have several friends who did his debt snowball (including myself) and his cash/envelope system. It works wonders--IF you follow it :-)
Good Luck!!



answers from Chicago on

It took me a long time to convince my husband to start a budget. He tried reading several of the financial books out there, but none of them hit home with him. Finally, he heard about Dave Ramsey and that did it. Check out his website at Hope that helps!!



answers from Chicago on

i am not a business woman so i needed simple
i used excell spreadsheet
listed all bills from student loans, water bills, car payments, average credit card bills etc
i got alot of my averaged from our bank we bank with 5/3 bank and pay almost all out bills online you can go to the last year and get an average becasue things like heat vary and credit cards with holidays and vacations.
so first column was name (discover card) 2nd was 2007 monthly average 3rd was 2008 months because for us some things like furniture and my car were paid off and didn't have monthly any more then 4th had 2008 pay offs totals like things that had 0% financing but were gong to be due then the 5th was 2009 pay offs the 6ths was the dates of the payoffs
if you have excell i could send you an easy example




answers from Champaign on

I like the book "Rich On Any Income" It helps you separate your money into categories and track your monthly spending from there.

Tracking into categories is exactly what they suggest! Especially to know where you are starting from.

Walmart and Target are my hard ones too. Sometimes I'll round up in one category (ex: groceries) and then take the total into the second category (ex: diapers) and subtract my rounded number to get an amount for the second category. Does that make sense?

I think this is a great step, life does get busier after a second child and it's better to budget while you are saving. Good luck!


answers from New York on

A good way to save a few hundred dollars in a year for your kid's clothing budget is a site called GumdropSwap ( You can swap from anywhere in the US by sending the clothes your kids outgrow to this kids boutique in CT. They give you points to shop on the website and send you a box of clothes that fit your kids. I've been a member for about 6 months and became friends with the owner because I was in there so much, lol.



answers from Rockford on

Can't explain it all like Dani did for me, but all I know is this budget is simple, my debts are getting paid a whole lot faster, and I have money.

I have been training with Dani Johnson and she teaches us to budget as God would want us too. This was tough for me to grasp as some weeks were tough to get through so I thought, but when God is in the mix, all works the way it is supposed to.

Anyway the very first thing she taught us is to open 2 checking accounts, one for God's work and one for bills and a savings account, for your savings (don't touch this one). Each and every payday, you first tythe, take 10% to give to God (can be to church, a great charity...something that helps women/men and children in need of food, housing, medical...), if you don't know where to put it, just get it into your God and account and leave it there till you decide. Then take care of yourself, take 10% to put into your savings and leave it there.

After that figure out your monthly bills and expenses. I get into my accounts online (I have a 5 x 8 card where I keep my account usernames and passwords to make it easy for me to keep track) and check the balances and amounts due then write them in my spiral monthly, I don't pay them online through the sites, I do it through my bank and have a second way to keep track of my expenditures for the month.

I keep track of all my expenses in a spiral notebook, I did the computer thing (Quiken, Excel), but when the computer crashed, I lost it all (my fault, I didn't back it up :( , my spiral is always here).

Next look and see what fat $ you can cut back on, do you really need the high powered cable with a million channels? Can you find a phone company that is less expensive and offers the same or more than you have now? Why are we shopping for more groceries when we have all those extra groceries in your pantry and frigde? And why when our kitchen is full are we eating out more than once a week? What other things are we paying for that we don't need or can get at a lower cost? What kinds of things do we have in our garages or closets that we don't use? Get rid of them sell them, (I put 10% into God's account and 10% into your savings) and pay off your debt. Cut out the extra fat!!

I guess part of is the Dave Ramsey thing too, you find the extra fat $ and pay off the lower bills first, take all that money and apply it to the next lower bill till that's paid off and just keep going. So if you have found $50 in extra fat apply it to Credit Card 2:
Monthly Payment

Mortgage $130,000
Car $ 24,000
$ 500
College $ 15,000
$ 250
Credit Card 1 $ 700
$ 25
Credit Card 2 $ 300
$ 13 + 50(Fat $)

Get Credit Card 2 paid off while still paying your other monthly bills then apply the $63 to Credit Card 1 (so you are now paying $88)

Mortgage $130,000
$ 1000
Car $ 24,000
$ 500
College $ 15,000
$ 250
Credit Card 1 $ 700
$ 25 + 63(Fat $)

till that is paid off then move the $88 to the College fund and keep going till your debt is paid. All the while you are budgeting, tything, and saving. Honestly if you stick with it, it works.

I don't care about making columns for food, gas...I just want to know where my money goes each month, so I just list it out at the end of the day:

Walmart - food $20
Speedway - gas $85
Mortgage - $1000
Credit Card - $100
Restaurant - $40
College - $500
Business Expense - $20

and so on if I want to know what I spent for food I look it up and add 20 + 40 and see I spent 60 of my $100 budget.

It is easy and works for us and since I started doing it this way, I have extra money the end of the month and I now sponsor a child in Ethiopia, give St Jude's, bibles for soldiers, and other charities that I always said I would do if "I had money".

Like I said, I can't explain it as well as Dani did for me, but all I know is I applied what she taught, my debts are getting paid, I have extra money in savings and to do things I want with my family.



answers from Chicago on

go get quicken for your computer. It will help track everything and help set up a budget



answers from Chicago on

I use a program called Mvelopes. It's based on the traditional "envelopes" method of budgeting, where you put a certain amount of money for each type of expense in individual envelopes, and once it's gone, there's nothing more to spend until it's refilled the next month, week or payday, etc. It's an online program, so you can access it anywhere you have an internet connection. To my knowledge, you can't do that with MS Money or Quicken. So, for example, if you want your husband to pick up groceries on the way home from work, he can look at your budget from work and see how much is left in your "groceries" envelope to make sure he doesn't overspend. All of your transactions are downloaded from your credit & checking accounts into your "register" (you can add cash transactions manually) and you put them in the corresponding envelope. In this example, when the grocery purchase shows up in your register, you transfer it to the groceries envelope and it will automatically deduct the amount from the amount you budgeted for the month. If you budgeted $300 for groceries and your husband spent $25, the groceries envelope balance will now say $275. That's how much is left to spend until you "fund" the envelope again. You can also split up transactions, so if you're at Target and you buy both groceries and shoes, you can split it up and put the expenses in the correct envelopes. It's a very flexible program. You mentioned your husband makes decent money so you're spending freely...if that's the case, I wouldn't worry about splitting out expenses to the penny. If the shoes were $35, just round it up to $38 to include the tax, put it in your clothing/shoes envelope and call it good. Then put the rest in your groceries envelope.

The first six months or so I didn't really use it to its full capacity. I just set up the envelopes and sorted my purchases into them to see where my money was actually going. I had no idea I was spending so much on gardening!

Here is the website:

Good luck!



answers from Chicago on

I am a huge quicken lover! I use it for everything and I love the latest version that lets you see your income vs. expenses on an ongoing basis. I save all of our receipts and I enter them once a week. I can print myself a report of my spending habits, my net worth, anything. I also love that it helps me figure out how to save more money suggests where I could cut back, alerts me if I'm over budget, and it will automatically make me a budget based on my spending habits and then I can go back in and adjust. I can also "hide" money away for Christmas or another big purchase we want to save for.

I could never get the hang of the envelope system because so many things are bought at like Walmart that in one trip I buy both groceries and household goods. What I ended up doing is I looked at our monthly expenditures in quicken and then I said okay realistically what is a reasonable weekly amount for food of all kinds, household goods, and small weekly purchases (renting a movie, buying a new book, etc). Then I go to the ATM once a week and take out that dollar amount. We have enough that I make it reasonable so I didn't cut our spending limit in half.

I read an article in money magazine that said when we use plastic even if you pay it off in full every month you will spend more money then if you paid with cash, because you don't feel the money leaving in the same way. So I banned my husband and I from using our plastic including the debit card for anything other than gas or a pre-discussed large purchase. It has been great and really curbed our spending. If my husband will be out for lunch I give him a $20 at the start of the day and request his change at the end of the day. When the money is gone it's gone so when we get to Wed. and have $40 left I say okay no eating out we have $40 for 2 days of food. It also helps me use the groceries I buy.

Sorry my response is so long!



answers from Chicago on

Someone recommended this to me and you can try it free.



answers from Chicago on

We have a software program Microsoft money and it is SO easy.. We don't have a budget yet but we can upload our account info and it gives us a chart of where everythign goes... pretty nice.

Its amazing what we can spend at target/walmart those superstores... between diapers and groceries and cleaner it gets EXPENSIVE!!

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