How To Make a Budget in 3 Steps

How To Make a BudgetDo you have a written household budget?  If not…consider this your weekly challenge: get your budget out of your head & onto paper!

You can also grab a FREE online Budgeting Tool and tips here..

Here’s how…just start filling in the blanks! (keep in mind that some income & expenses may not apply to you…e.g. alimony!)

Step 1: Start with total monthly income:

• Salary
• Spouses salary
• Child support
• Alimony
• Other

Step 2: Next, list your monthly expenses:

• Mortgage/rent
• Insurance (auto, home, life, health, disability,dental, long term care)
• Car payments
• Child care
• Clothes
• Memberships (country club, pool or fitness center)
• Lessons (piano, dance, etc.)
• Cleaning service
• Lawn service
• Pool service
• Loans (home equity, student, credit cards)
• Savings (college, retirement, vacation, emergency)

***Some expenses (like the ones below) tend to fluctuate, so calculate the average monthly expenditure:

• water / sewer
• electricity
• gas (not for your car, but your home)
• Internet
• Cell Phone
• Phone
• Cable or Satellite

Step 3. Now the fun part…simply subtract your total monthly expenses from your total monthly income.

Take a long, hard look at this number because that’s the amount you should be living on every month…food, fun, gas, dry cleaner & all those everyday expenses! Please keep in mind that the average family of four spends $800 – $1000 per month just on food!

Also, make sure to grab the FREE online Budgeting Tools at Learnvest:

Let’s suppose you have $2000 left to spend. Set aside 30% ($600 per month) for expenses that I refer to as “Oh No” expenses…car repairs, plumber, doctor visit, big gifts, etc. These expenses should not come from your “emergency” savings because these are not emergencies…they are just part of life, & they will come up every month! If you don’t budget for them, you’ll end up going into debt to take care of these expenses.

After you set aside $600 for “oh no” expenses, you’ll have $1400 left or $350 per week…known as “weekly allowance”!

Put your $350 weekly allowance in your wallet…spend wisely because when it’s gone, it’s gone!

Let’s get this budget diet started right now!
The Budget Diet is a diet for your wallet…not your waistline, and sometimes your overspending requires your wallet to go on a CRASH DIET!

If you’re in need of some serious savings, consider this your weekly challenge!

It’s a simple 3-step process, here’s how:

#1. You must know the amount of your weekly allowance…see above.

#2. Once you’re used to spending your weekly allowance and not a penny more…let the crash diet begin!

#3. Starting this week, allow yourself to only spend half of your weekly allowance! Example: If your weekly allowance is $350, you’re going to have to live on $175…food, fun, gas, dry cleaner, etc. Continue the crash diet for 4 weeks!

This is a tough challenge, but it will force you to change some spending habits & save a lot of money!

You’ll have to think twice about every purchase!

Happy saving!

Guest post by: Kristl, from the Budget Diet

The Budget Diet is a diet for your wallet…not your waistline! You’ll discover new money saving tips everyday to help you slim down your daily spending! The Budget Diet girl Is not a financial planner or an accountant…just a mom that knows how to live the good life on a budget! Follow The Budget Diet on facebook or twitter.

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  1. says

    I’m curious, what kind of family of 4 spends $800-$1000 on food alone a month?? I know we spend alot more that most people and for our family of 4 we spend $300. $350/week for spending money seems a little insane too.

    Does this seems very high to anyone else?? :)

  2. says

    So, how do you budget for a family of 4 that brings in less than 1k a month?
    I have bills of roughly half my monthly income not including food, car fuel, and upkeep plus medical and emergencies.

    • says


      That’s a tough one, first I don’t know how much your expenses are and then $1000 a month is probably going to be tight no matter where you live.

      But no matter if your income is $1000 a month or $10,000 the principle is the same. Map out your expenses and match it to your income. If your income is less that expenses you have to figure out how to bring in more money.

      And that can either be by receiving government help (ie: medicare, food stamps, wic..ect) or somehow making more money.

  3. shannon b says

    I have a family of 4 and we spend 800+ a month on food. This includes Costco, which may or may not be all food items. We have 4 dogs and 5 cats so their food is included in our total spent. I am going to do this budget. I have tried many years to stick with one but have no will power on my spending. I will try the weekly allowance system and included all the mentioned areas for that to cover. I know we can pair down our food expenses so I will keep you posted next month on how we did.

  4. Strawberryvogue says

    Thank you for the tips!

    The $800-1000 seems about right for a family of 4, especially if you cook your meals (like myself and use a lot of vegetables). I also cook more than enough for the next day’s lunch. I struggle with the food budget. Especially since I’m never sure to stick dinner parties to the ‘extra’s’ budget or our regular food budget. I have cut food costs down to $425 using coupons. In my family I have a free spirited 4 year old, a picky husband and 9 month old son. It’s hard to find good meat deals and it’s way easier to coupon for shampoo, soap, deorderant than food itself.


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