Let’s be honest, budgeting can suck.
And I have too much Netflix to watch laundry to do to spend hours trying to figure out how to budget.
I would feel like I was constantly trying to catch up on my budget each month. It took soooooooo long trying to figure out how to budget my money … and pay off debt …. and put money into savings …. and still make dinner.
So I’d get frustrated and eventually turn on Friends on Netflix and continue procrastinating until the next month.
BUT – the whole month I’d be stressed because I never knew if we had enough money to pay our bills … A never-ending, guilty, stressed-out cycle.
And it’s not just me that this happened to, I realized that it was happening to my co-workers, family, even the nosy neighbor.
In fact, only 41% of Americans are using a budget according to a study by U.S. Bank.
I was done with the stress and guilt.
What I needed (and so many other families) was a budget that was fast, effective and simple.
Because I knew that if it wasn’t simple (borderline lazy), I just wouldn’t do it.
What happens when you Budget
Budgeting “just do to it” is lame. You have to figure out why YOU need to keep a budget and set a goal.
Want to pay off student loans? Great!
Tired of living paycheck to paycheck? Awesome!
Don’t want to stress if you’d like to take a last minute vacation? Got you covered.
There’s a whole cycle that happens when you start keeping a consistent budget:
1. You start becoming conscious of your spending
2. Stop living paycheck to paycheck
3. Gain control of your money
4. Pay off debt
5. Make more money
6. Have the freedom to do what you want
All of that happens by ONLY spending 30 minutes each month.
If you want a free PDF version of my budget time breakdown, you can snag that here.
Can you mange your money without a budget?
Totally. That’s the goal.
But when you’re constantly living paycheck to paycheck, still in debt and have nothing to show for in savings … you need a little extra help.
So, how do you create a budget in 30 minutes each month?
Start with a Budget Base
The first necessary step is to create a spending plan.
(If you have a spending plan you’ve been using you can scroll on down to see the exact time breakdown of my budget.)
This is your budget base and what you’re going to use every month.
To create your spending plan you’ll begin by going through your past months expenses. (I can hear your groaning, trust me after going through this first part it’ll be so much easier!)
If you’re with a bank that’s actually in the twenty-first century and has online banking then you’ll be able to access the expense statements online.
Do this with each debit AND credit card.
Once you have each expense statement of purchases for the PAST month, you can start adding them into categories.
These are the categories I recommended starting out with:
Housing – mortgage or rent
Utilities – electric, gas, sewer, water, internet, HOA
Auto/Home Ins – if you pay yearly divide that payment into 12 months
Tithing – any charitable contributions you make
Fuel – if you have a vehicle you pay fuel for
Groceries
Eating Out
Car Payment(s) – if you use a ride-sharing service or bus include the costs here
Medical Bills
Student Loan
Household/Clothing
Subscriptions – or any recurring services you have
Misc. – any random purchases that aren’t an every month expense I put in the misc. category
(If there are any other categories/debts that are regular purchases or payments each month then you’ll want to make additional categories for them.)
After adding up each purchase for the past month in every category you’ll write the amount you spent for each in a budget template.
You can snag a free budget template in the freebies page, make your own personal one or use the one out of the Financial Success Planner.
Don’t forget to include your income in your budget base.
This new spending plan that you’ve made will be the base of your budget for the rest of your life.
You can update and change however needed, but once the spending plan is done you can continue using it each month.
Automate to the Max
After splitting up expenses into categories you can now automate your life away.
If I could automate everything I would. Automation makes paying bills a breeze and not having to worry if your lights are going to shut off because you paid your bill late gives you more time worrying about where to pick up dinner.
Any bills that have auto pay available, sign yourself up!
If you’re worried about not knowing when they’ll come out of your account, I keep a calendar each month and write in what day each bill will come out. (You could even do it on your phone’s calendar.)
One of the experts in automating your finances is Ramit Sethi, he has really great advice on automating any payments and savings. You can check out his 12-minute guide to automation here.
Next, Expected Expenses
Now that you’ve gone over last month’s expenses, divided them into categories and automated anything and everything you could, you can now determine the expected amount you’ll spend next month in each category.
Go through each category and create next month’s expected expense and write it or type it wherever your basic spending plan is.
For example, if you’ve spent $346 in groceries last month, next month’s expected expense in the grocery category will be $350 or even $400.
(I always round UP. I’d rather be safe when it comes to my expected expenses, that way it’s a happy surprise if I spend less instead of feeling guilty for going over.)
You’ll do this each month.
I print out a blank spending plan and put in my expected expenses for the next month based on the past month’s budget and raise or lower if needed.
It’s seriously that easy.
Start Following your Budget
You’ve created your budget base and now all you have to do is start following it.
This is where it gets reeeeeeeal simple.
Each month you’ll evaluate how you’re doing in each category.
If you’re just starting your budget, you’ll stick with your budget base for 3 MONTHS before making adjustments to categories.
If you’re continually going over in a category (for us, it’s always eating out) don’t stress. Just adjust accordingly.
Your budget should be flexible to what YOU need.
There’s always going to be stuff that comes up and it will take a few months to get the hang of it.
Multiple Budget Methods
Cash Envelopes
To make budgeting even easier for you every month there’s a few budgeting methods to help out.
My favorite way is using the cash envelope method, this is what we do each month.
I know there’s a lot of talk lately about ditching cash. And if you loathe the thought of carrying cash around, that’s totally fine.
The key is to do whatever will motivate and help you.
For us, having cash makes it easier to physically see what we’re spending. We don’t mind carrying cash around and credit/debit card information can be stolen just as easily as cash can.
We don’t take out cash for everything, just specific expenses like groceries, eating out, entertainment and our own personal amount.
(Each month we give ourselves a certain amount that we can spend on whatever our little hearts desire.)
And to make things even easier (I don’t know how much easier it can get) I don’t track expenses from the cash envelopes. There’s no way I’m going to track all those receipts down! All I need to know is how much I started with and how much I ended with.
(Above are the exact envelopes I use each month, I just got them off Amazon for only $13 bucks. They’re a laminate so they’re really sturdy and have lasted me a while. You can snag the envelopes here.)
Budgeting Apps
They’ve come a long way with budget apps and there are some really awesome options that you can use to budget directly on your phone (it’s truly a great time to be alive.)
One of the budget apps that is really user-friendly is Dave Ramsey’s EveryDollar app. There is a free and paid version. The paid version will actually connect to your bank account and manually put each expense into the right category.
The free version of the app is still just as useful, however you will have to manually enter in each expense. But it will still track the percentage you’re spending in each category.
Another awesome app is YNAB. They offer bank syncing, goal setting and even personal support.
It’s a yearly cost at $84 a year, but you can cancel it at any time if you feel like it’s not helping you.
Other options are using budget templates (which I use along with the envelopes) or even a spreadsheet online.
Exact Time Breakdown of how I Budget Each Month
Now that you’ve created a budget, it’s time to implement it. Below are the exact times it takes me to budget each month.
I don’t budget in one 30 minute session, it’s broken up into chunks throughout the month.
If you’d like something you can keep for later, or print out a physical copy, I made a free PDF version of the steps I’m going over below. You can snag the free PDF here.
Step 1
Fill in expected income and expense categories for next month
Use your budget base to determine your expected expenses for next month. Write it down in your budget template, app or spreadsheet.
TIME: 4:00 minutes
Step 2
Make any adjustments to categories
After sticking to your base for 3 months you’ll make adjustments. Spending less eating out each month than you expected? Lower it.
You can raise and lower categories where needed, or even add additional categories.
TIME: 6:00 minutes
Step 3
Track expenses two weeks into the month
Around two weeks, or towards half of the month, you’ll want to go through and track expenses starting from the beginning of the month.
(You can use the free expense tracking sheet in the Freebies page, or use the one in the Financial Success Planner.)
When I’m using the cash envelope method I don’t keep track of every purchase I make with cash. I just evaluate how much money I have left in the envelopes.
But, I will track any auto payments or things we’ve bought and didn’t use cash for (like our Hulu subscription. I just can’t quit The Bachelor.)
TIME: 8:00 minutes
Step 4
Update expense categories and cash envelopes (if using)
Update your budget template and write in the current amount you’ve spent so far in each month.
It’s best to use a pencil since these aren’t your final expenses for the month.
If you’ve been using cash envelopes you’ll write how much you’ve spent so far in each envelope.
TIME: 4:00 minutes
Step 5
Track expenses the last week of the month
You’ve made it to the end of the month and now you’ll track the rest of the month’s expenses!
Typically when I track the last of the expenses I’ll do it on the last day or two of the month and we’ll do a spending freeze, or use the cash in our envelopes until the next month begins.
TIME: 8:00 minutes
TOTAL TIME: 30 Minutes
Seriously, ONLY 30 MINUTES!
And you don’t even have to do it all at once! Just 8 minutes here and 4 minutes there.
You spend more time doing laundry every month than you would budgeting!
Budget Tip: Because my husband and I get paid on two week intervals we don’t start our budget until the 5th of each month.
That way we know that one of us will get paid by that time and we can pull out cash for the month.
So, I would finish tracking expenses on the 3rd or 4th of the month and continue using the cash from our envelopes until the 5th.
If you’re not using envelopes, after tracking expenses you’ll want to do a spending freeze until the 5th (or whatever day you start your budget) or, you can take out cash and use that until your next month’s budget starts.
How do I budget for emergencies?
Every single family should start with a $1,000 emergency fund.
Totally unexpected expenses happen, like having to fix your car or a medical bill.
To stay on budget you need a type of buffer. This is where that $1,000 comes in.
After paying off debt you’ll want a 3 – 6 month emergency fund as stated by Dave Ramsey. But starting with $1,000 can help until you get to that point.
How do you budget irregular income?
There’s a common myth that you can’t budget if you have irregular income.
That’s totally false and actually complete opposite. You DEFINITELY need a budget if you have irregular income.
You’ll follow much of the same steps for a 30 minute budget, however for your budget base income you’ll want to use the least amount you’ve made in a month in the last 2 years as the base income.
From there, any extra money you make above that you can divide into the categories. You can head over here to check out all the details about budgeting with irregular income.
How do you find extra money to use for your budget?
You’ve made your budget and realized that you have more expenses than income … or, you’d like to raise your expenses WITHOUT having to be frugal (having to live frugally is the worst and sucks even more than budgeting.)
There’s two things you can do here:
1. Cut unnecessary expenses
2. Increase income
When I say cut unnecessary expenses I don’t mean making your own laundry detergent.
This is stuff such as cancelling subscriptions you don’t use anymore and shopping around for a better deal on insurance. (Nothing too wild, but I guarantee there’s one or two expenses you can find.)
Or, you can increase income. This could be asking for a raise, starting a side hustle doing something you’re good at. Or, even starting a blog.
Michelle from Making Sense of Cents has been able to make over $100,000 a month just by starting a blog and sharing what she’s passionate about. She’s even shared 10 steps you can take to start a blog to make money that you can find here.
Keep it Going
There’s a whole cycle that happens when you start budgeting regularly.
You start by watching your spending, then paying off debt, finally saving up some money and eventually leading you to a paid for, stress-free life.
The benefits of budgeting are endless and it can be super simple if you just break down the steps.
And now you can successfully budget your money without spending hours of your time trying to figure it all out.
If you’re ready to get serious about budgeting, all it takes is 30 minutes. And you can start by snagging this free PDF file of my full budget time breakdown.
How long does it take you to budget each month? Are there any things you do to make it faster?
[…] Budgeting may not always be the funnest thing to do (believe me, I KNOW), but it’s the most effective way to stop living paycheck to paycheck.Trust me when I say I really hated budgeting too. That’s why I created a system to successfully budget in only 30 minutes a month. […]