To reach personal financial goals a budget is an essential tool – if you stick to it! Making and sticking to a budget can be a challenge. It’s easy to throw some numbers on a legal pad or a spreadsheet but when it comes to in the moment spending your budget is too often out of sight out of mind.


Making a monthly budget allowed us to pay off our debt, my wife to stay at home with our kids and the freedom to pursue an intentional alternative lifestyle. The key is to commit to doing a written plan on paper on purpose every month plus budgeting every-single-dollar you earn.


If you do not have an intentional plan and tell every dollar what to do – you will be left to whatever whim you have in the moment. This is reckless and the quickest way not to reach your goals. Here is how we make our weekly budget:





1. Make a Base Budget (aka Bare-bones Budget)

A base or bare bones budget includes all the things you have to pay every month. Things like rent, food, gas, insurance, etc. For most months these items will remain the same.


2. Add Month Specific Expenses

Next you will add in any additional expenses for the month. Depending on the time of year this may be gifts, medical expenses, vehicle repairs, travel, giving projects…anything that needs to be payed that is outside the base budget.


3. Zero Balance

This may sound obvious but your spending cannot exceed your income. (Unless you are the government.) Take your income subtract your base expenses and your month specific expenses and you will get a number. If this number is a (-) you need to remove some non-essentials items from the budget until you reach a zero balance. If the number is a (+) you can either add to the giving, saving or spending. The goal is a zero balance.


5. Cash Envelopes

Using cash for certain purchases is a powerful tool that helps you spend less and stick to your budget. (see below for our cash envelope categories) Once the budget is balanced we pay our bills (the majority of these are done through bill-pay online) then we write ourselves a check for our cash envelopes.


That’s our monthly budgeting process. Simple and it works! Here are a few additional things that we have learned over the years that may be worthwhile:


Cash Envelope Categories

We use cash for: food, gas, personal spending and clothes. Food is one of the best areas to use cash for because it’s one of the easiest to overspend.


Unexpected Purchases

There will always be things that come up after the budget is completed. The best way to handle these is to communicate them with your spouse (before purchasing!) then sit down and look at the budget to decide where the funds are going to come from. This way you are very intentional with what is happening instead of spending savings or other funds on things that just pop up.


Get on the same page!

If you are married you have to be on the same page with your spouse to win with money. This means each of you have to come to a consensus on what you should and shouldn’t spend your money on. If you are struggling with this we highly recommend Financial Peace University!


Is there anything that works for you that we missed? Would love to hear your thoughts — comment below!



Dave Ramsey – how to make a budget