Whether you’ve decided to to learn how to start a budget or are just thinking about it, I’m so glad you’re here! (If you’re still on the fence you’ll want to read Why Should I Start A Budget here first.)

Is it time for you to start a budget? Well, grab your pen and paper as we dig through your money and finances and get you started on a budget!

The budgeting system I’m going to share with you is the same one I’ve been using since I was a teenager. Yes, I’ve been on a budget for that long – and have absolutely no regrets!

Whether you decide to use my budgeting system or another one, I want to challenge you to try a budget for at least six months. That may sound like a long time but I promise it will give you enough time to work out the kinks and get into the groove of budgeting. If, after six months, you don’t like it you can always go back to what you were doing before.

So let’s dive right in and let me show you how to start a budget!

Step #1 – See Where You’ve Been Spending Your Money

Before we can tell your money where it needs to be spent we need to figure out where you’ve been spending it. The idea behind this step is to gauge how much money to allocate in each category in your budget.

Grab a piece of paper and your checkbook or credit card statements and, being as detailed as possible, write down every purchase that you made in the past three months. If you bought a cup of coffee, write it down. If you went to the grocery store, write it down. You get the idea!

This step is very eye opening for a lot of people because they don’t realize how much money they’ve been spending on certain areas.

Is it time for you to start a budget? Well, grab your pen and paper as we dig through your money and finances and get you started on a budget!

Step #2: Make Budget Categories

Now that you’ve written down where you’ve been spending your money we are on the right track to creating a budget that will fit your needs. The next step is to make budget categories. These are the areas where you plan to spend your money.

Be as specific as possible and make a category for anything you plan to spend your money on. (I helped a friend start a budget recently and she added a category for lawn care, babysitting, and the gym.) Every family has different needs which means that every family’s budget is different.

Below are the categories we use in our budget. This will help get your creative juices flowing and give you some ideas of the type of categories you need.



Car Payment/Fund
Car Tags
Oil Changes
Car Repairs

Home Insurance
Car Insurance

Household Expenses
Cell Phone
Doctor Visits/Copay
Blow/Entertainment Fund

Christmas Gifts
Birthday Gifts

Spouse #1 Spending
Spouse #2 Spending
Vacation Fund

Debt #1
Debt #2

Step #3: Cash Flow Your Budget

When you start a budget, this part is the most daunting and may be frustrating. (But I promise it is worth it!) Don’t start this step unless you are at your best for the day. Make sure there are no distractions or interruptions so you can focus.

It’s time to cash flow your budget by assigning a dollar amount to each of the budget categories that you created above.

The goal here is to spend every dollar you’ll be bringing home on paper before you’ve even make it!

How To Decide How Much To Put Into Each Category

The best place to start is to look back at the list you made in step #1 and see where you’ve been spending your money. If you’ve been spending $400 a month on groceries then put $400 in the grocery category. If you’ve been spending $200 a month on fuel for your vehicle then put $200 in the fuel category. I think you get the picture!

Insurance and Car Tags: The amount that needs to go into these categories will vary depending on when you last renewed your policies or car tags.

If you renewed them six months ago you will need to plan accordingly.

Example: If your payment was $500 you you renewed your policy 6 months ago, will need to divide $500 by 6 months. (Then when they renew in six months you will need to adjust your categories because you won’t need to save as much for the next renewal.)

Christmas Gifts: Gauge the amount for this category by how much you plan to spend on Christmas gifts for the upcoming holiday.

Example: If you want to spend $600 on gifts and start your budget in the month of July then you will need to save $100 a month in order to have $600 by the time Christmas rolls around.

I Work On Commission: If you work on commission or your checks vary each month, base your budget on the lowest amount your check will ever be. Then make a list of categories you’d like to spend any extra money.

Once you’ve placed a dollar amount in each category now you need to add up the categories for an overall total. You have a couple options here:

The overall total of the categories needs to match the amount of the paycheck(s) that you bring home each month. If you’re like most people you will have to adjust the dollar amounts in some of your categories so that it will match your paycheck. And I hate to be the bearer of bad news, but you might not be able to have certain categories (or as much as you had hoped in them) until you pay off some of your debt.

I understand just how hard this step is because there was a time when my budget was so tight that I didn’t have a blow category. I also remember having to take items out of my cart at the grocery store because I didn’t have enough in my food budget to cover them all. Why am I telling you this? I want you to know that I’m not asking you do something I haven’t done myself.

I get it…it is easy to get frustrated during this process of making the budget categories match your paychecks and what you’re bringing home. That being said, if you need to take a small break and come back, please do! If you get stuck and have questions, please don’t hesitate to shoot me an email – I’m more than happy to help in any way I can!

Once you’ve finished this step you’re home free. Not only have you learned how to start a budget but you’ve successfully created one for yourself and your family!!!

Is it time for you to start a budget? Well, grab your pen and paper as we dig through your money and finances and get you started on a budget!

Bonus Step: Agree With Your Spouse (Optional But Highly Recommended)

Money is the cause of many fights in marriages. I can’t stress to you how important it is for you and your spouse to be on the same page and agree on your new budget.

Hopefully you and your spouse created your budget together. If you didn’t, I recommend that you sit down together and go over it with a fine tooth comb. Trust me, your spouse will probably have their own idea about where your money should be spent!

Tip: (I can’t stress this enough!) Ladies if you are the one working your family’s budget each week/month, please involve your husband. God gave the husband the responsibility of being the leader of your home so he needs to know what’s going on with your finances.

There have been a few times when we’ve had an extra bill pop up for the month. I have taken the responsibility onto my shoulders of figuring out which category to take the money out of when I could have saved myself a lot of stress and just asked Trent to help me. (He always has the best ideas!)

Learn from me by saving yourself some stress and asking your husband to help you figure out what to do. After all, you are a team!

One Last Tip

Life is ever changing and your budget should be too. The dollar amounts you put in your budget categories are not set in stone and if you need to change them do so! (That being said, when you first start a budget I recommend that you keep them as is for at least 3 months and change accordingly after that.)

A budget will give you a newfound freedom that you thought you could never have. You no longer need to wonder how you’re going to pay for this or that because you’ve set yourself up for success and have a plan! (Yes, there will be unexpected bills or expenses so keep that in mind and don’t be shocked when they show up in the mailbox.)

 What are you doing still sitting there? Go get your checkbook/credit card statements and start a budget!