Tips for Creating a Budget

Following the positive responses to yesterday’s article on Family Finances, I have decided to write several more posts on various aspects of our journey toward financial peace. The first thing we tackled was budgeting. Here are the things we learned from Dave Ramsey’s Financial Peace:

In a marriage, it must be a team effort!
The free App EveryDollar is amazing!!! It allows you to create and track your monthly budget.
Budget categories are fairly standard. Specific allocations within them vary.
- Income
- Giving – 10% off the top
- Savings – emergency fund, sinking funds
  - An emergency fund is just that, only for emergencies.
  - Sinking funds are for larger items that you need to save up for. The final cost won’t affect the monthly budget much when you put a little away each month.
- Housing/Utilities
- Lifestyle – clothing, entertainment, pocket money
  - Pocket money is money you and your spouse agree to gift yourselves each month. It is outside of the directed money and you are each free to spend it on whatever you please, no questions asked.
- Transportation – gas, tolls
- Food – groceries, dining out, cafeteria
- Insurance & Tax – auto, life, home
- Debt – everything but the mortgage
Start with what you know – housing, utilities, bills, food, gas. If you’ve never budgeted before, it might take examining old bank statements to figure out how much you have been spending.
Sinking fund will require research and consideration too. We have several – HOA fees, vacation, car maintenance, gifts/holidays.
Assign every dollar a purpose! Tell your money how you want it to work for you.
It takes time! It took us three months to arrive a fairly standard budget and we still tweak it each month depending on our needs.
Be accountable to the numbers! Once you decide on a budget stick to it. You can always change it next month.