How to Train Yourself to Start Budgeting.

Author: Ryan Dickey: Microbiologist, Husband, Dad, Spender of Money.
Last Updated: 02-05-2019

Who has Time to Budget?

Starting a budget is a daunting task. You have to do more math and strategic planning in single sitting than what you intended to do all week.

But you have to start somewhere, you know you do, right?

Or maybe you have tried to start before and always failed, well read this through to the end, give it a try, and I’m certain you will be pleased with the outcome.

To start with, I’m about to tell you something that contradicts what many other budget guides might say: If you’ve never budgeted in you’re life before, don’t jump into the thick of it now.

Seriously, don’t. It will become overwhelming and leave you in the same place where you started.

You need to understand your finances before you can create a budget. And that’s how you start, by coming to understand how you spend your money.

Getting to Know You

You’re going to begin with organizing your spending into three categories (two categories if you don’t have savings, which is becoming a very common issue in modern America, so don’t be embarrrassed, you’re not alone: as in 65% of people in the US don’t save their money).

Your first category is fixed expenses. These are your bills, or any expense you have that requires you to pay a set amount at a given time.

This includes phone payments, utilities such as electric and water, internet service, credit card payments, rent, car payment, tv or paid media services like netflix or hulu, and any other services that you pay for every month.

I recommend perusing over you banking history for this part to make sure you’ve not missed anything.

Your second category is your savings, how much you are putting away for your future or in case of emergencies. If that is nothing, then skip over this for now.

The third category is all that remains, and this is your ‘monthly allowance’, or your spending limit. This is what you have to stretch for groceries, essentials, gasoline, entertainment and all other variable expenses.

If you start by identifying the cost of these three categories, you can begin to understand your financial situation. And from here you can make plans for what comes next.

So, I’m Completely Screwed, Now What?

If budgeting isn’t your thing, then this is probably how you’re feeling after completing the first steps. But all is not lost.

Now you track your monthly spending until you are conditioned to living in the prison of financial responsibility.

Sorry, I couldn’t think of a more pleasant way of putting that.

Let me try again…

Now that you see where you are, you need look at where you’d like to be.


Blah blah blah, classic budget rule of thumb. 50% of your expenses should be for necessity, 30% for entertainment or flexible spending, and 20% for savings. Yea , right.

Don’t worry, we’re not getting into all of that here, this is just to train you to start handling your money so that a budget can begin to work for you. That being said, you want to aim for that magic 50-30-20 ratio all the same. The closer you are to this balance, the better off you will be: it grants financial peace of mind. But I understand it’s not likely possible for you, and that’s not the point of this article. So let’s see what we can do to help.

Let’s Look at an Example

So, for this next part we’ll use an example to guide us through how you are going to organize the information you’ve gathered.

Lets say your combined total take home amount per month is $4000 (the squarely average middle class number), and you have no savings account (also, the norm).

And your fixed expenses look something like this

Due DayCollectorAmount
1Natural Gas $50.00
5Mojang/Minecraft $8.23
5Rent $1,050.00
7City Utilities $300.00
7Student Loans $185.60
9Auto Loan $380.86
9Credit Card 1 $27.00
10Web Hosting $17.99
10Auto Insurance $118.62
14Direct TV $123.24
15Cell Phone $152.00
16Netflix $10.99
16Credit Card 2 $65.00
17Credit Card 3 $285.00
19Credit Card 4 $63.00
26AT&T $64.63
28Student Loan – Spouse $113.58

Note: some of these numbers need to be estimates: natural gas and utilities will likely vary each month, so pick a number that represents what you are most likely to pay.

What’s left is $984.26, that’s roughly $246 per week for groceries, gasoline, necessities, and any entertainment budget you might hope to have. And to leave yourself some wiggle room, you’re going to set that spending limit at $225 a week. If you’ve got kids, you’re probably going to be struggling to make it on that, especially if they’re involved in any extracurricular groups; sports, band, choir, drama, debate.

The national average cost to feed a family of 4 is $239 a week, $191 for a low-cost plan, or $146 for a thifty food plan. Set a goal for yourself depending on what your spending limit comes out to be.

If the number you end up with as your spending limit is unrealistic, then the first thing to look at is which of your fixed expenses are non-essential. This part sucks, because proper budgeting means living within your means, and that credit card debt will get you every time.

If you need to let something go, start with things like tv, netflix, video game subscriptions, your web site if it’s not your source of income, and internet service.

Check Yourself

At this point, assuming you’re reading this because budgeting has never worked for you, you are going to set up a second free-checking account. Set up automatic transfers through your bank from your primary account into the new account: one transfer a week for the amount of your spending limit. Call this account your spending account, your primary account is for bill pay only.

Now you only allow yourself to use this account; all of your other money is literally already spoken for, you can’t touch it.

With this system in place, you never see the rest of the money when checking how much you have available. And now, you just maintain this spending limit. Yup, just keep living with it, you will slowly accrue money in your primary bill pay account (that buffer amount we left behind), and this can beome the basis of your savings account if you don’t yet have one, and you can rest assured that all of your bills will be paid- you can even set them all to automatic withdraw to avoid accidental late fees.

And this is how you train yourself to start budgeting.

Once you’ve become conditioned to living within a spending limit, then you can start shaving expenses and reordering your budget into something that works for you. This is where the real budgeting begins.

If you’d like to follow up on what that next step looks like, I will soon release another blog covering how to begin budgeting, and I will link to it from here.


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