We are so excited to be finally sharing this post with you all! Since we started following Dave Ramsey’s teachings we’ve sworn by a budget. Having a budget has helped us tremendously, with and without debt. We know even the word ‘budget’ itself can sound pretty intimidating but we’re here to tell you that it shouldn’t be. It’s not a life or death sentence, folks. It’s a very helpful tool to help you stay on track and structure your spending. We’ve also learned that setting up a budget doesn’t have to be as difficult as it sounds. Today we’re sharing how we do that so you can easily set one up too.

Before we get into we need to mention a few things:

• We set up our budget the same way before and after debt. We just stopped at step 2 listed below.
• We highly, highly suggest sitting down at some point during the end of the month with your spouse to create the budget for the upcoming month and to go over the budget from the previous month. This is key to making sure you both are on the same page. If you aren’t married, set aside time to do it alone. Of course it’s okay to do this on the first day of the month but we’ve learned that it works best for us to do it in the week leading up to it so that we can make sure it happens. MAKE IT A PRIORITY! Amy Kiefer from balancedames.com talks about the importance of these meetings too. She is so stinkin’ precious (this is coming from Jordan… haha!).
• Download the Every Dollar app. It’s free and easy to track the budget with. We’ll share all about how we do that in the next post!

How to set up a budget:

1. Start with the basic necessities that are needed to live. Go through each one of these in order. It’s probably going to take some thought which will take a bit of time but it’s so important to get these numbers locked down. On the bright side, this part of the budget won’t change much from month to month except utilities.
   1. A roof over your head: Rent/mortgage, this should be less than 25% of your monthly income. If you have a mortgage, we suggest getting a 15 year at a fixed rate. The amount of interest you’ll pay for a 30 year might make you sick to your stomach (it did for us). This number should be pretty fixed unless a rent payment is increasing from one year to the next or you’re moving.
   2. Utilities: Electricity, gas, water, sewage, garbage. At the start of the month, be very conservative with your estimate for these bills since they are typically not consistent from month to month. Give yourself some wiggle room and then once you receive the bill, you should have that money left over to put towards debt or into savings or another category in the budget. Phone, internet, and cable can also be in this category. However, we know they’re not necessities to LIVE and if you have debt, you shouldn’t have cable. You should also consider reducing your phone and internet plans to cheaper options until your debt is paid off unless your income heavily relies on those resources.
   3. Groceries: We’re going to go in full detail as to how we budget for groceries. In general, we TRY to follow the rule of $100 per person for the month starting at $300 aka we have $300 to spend on groceries for the month. So for us we shoot for $75 per week at the grocery store.
   4. Transportation: Since gas prices are always changing, we suggest being conservative with this number too. We have a good grasp as to how much gas we go through in a month so just like with utilities, we give ourselves extra in this category. Another thing that also needs to be included in this category is scheduled maintenance such as an oil change or new tires. These things are not an emergency which means they can and should be budgeted for.
   5. Insurance: Car, home, health, whatever. If you pay your insurance monthly, it should be easy to budget for because it’ll be pretty consistent. If you’re like us, however, and you pay insurance bills every 6 months, what we do is budget for it as if we pay it every month. We basically just pay ourselves every month by putting the money into savings. That way, when the time comes for us to pay the bill, we have all of the money we need saved up to easily pay it. At the start of the month, budget for this expense and do not spend this money. At the end of the month, move the money into the savings account and do not touch it until you have to pay the bill.
   6. Giving: We realize that some people might not consider this a necessity but we do. This is entirely a personal decision but for us the mindset is simply that we wouldn’t have any of our money if it weren’t for God. It’s ultimately His. We give our money because of that. Even if we were completely hurting for money we give and we have faith God would do bigger things with the money than we would.
2. Now comes all of the basic ‘lifestyle’ budget categories. To figure out how to proceed, we look at all of the money we have remaining after all of the necessities are budgeted for and from there we decide how we want to spend our money.
   1. Debt: If there’s any sort of debt, the majority if not all should be going towards it. It really just depends on how fast you want to pay off the debt. We of course suggest doing it ASAP and making the sacrifices to do so. It’s worth it. If you have debt, the only category we would have outside of necessities other than this one is the ‘miscellaneous’.
   2. Miscellaneous: We typically put $50-100 (this is based on our budget!) in this category for things like haircuts, birthday gifts, postage, etc. Basically small dollar amount purchases that don’t belong in any other category. These are somewhat “necessities”. This shouldn’t be a free for all category if you have debt.
   3. Restaurants: We set aside $100 (based on our budget!) for the month for restaurants. We don’t go to as many sit down restaurants now as we used to so this amount works just fine for us. We don’t eat out during the week really at all so we save that money to eat out about once every weekend.
3. If you’re debt free, decide how you want to budget into the four ‘buckets‘- giving, security, convenience, and hobbies (or another way of putting it, “things that bring you joy”).
   1. The only one that has a bit of a caveat is the ‘giving’ bucket. We know that we mentioned that bucket category as a necessity above. For us, it is a necessity and we choose to give our money before spending it on ourselves. However, we also understand if money is so uncomfortably tight that you feel like you’re treading above water and don’t have room to give. Pray about it and make the choice that is best for you and your situation. If you don’t feel like it’s a necessity that’s fine too! That’s why we put it down here along with the other bucket categories.
   2. The way we go about the buckets is by discussing our plans for month. Are there trips we plan to take? Projects we want to complete? Gifts we need to buy? Anything in particular that we want/need? Etc. All of those answers decide how much money we put towards each bucket. If we know we have a lot of projects we want to do, we’ll put it all towards our “house décor” category, put some in savings (the security bucket) and be done with it. If there’s more we need to budget for, we estimate the amount we’ll need in each category and put some in savings. Even though we already have a 3-6 month emergency fund, we always put a little in savings every month.
   3. We get very specific about what we plan to spend. For example, we are finalizing our capsule wardrobes this month so we set a budget specifically for clothes. We also know we’re going on a trip for Memorial Day weekend so we have a budget specifically set for that weekend, for landscaping, plyo boxes we plan to build, etc. We estimate how much we’ll need for each category and then any money leftover will go towards another category if we underestimated that category or into savings. If we didn’t budget enough into a specific category, we take money out of one of the other lifestyle categories but never one of the necessities. The category we take from will either have to be pushed out for a month or we’ll have to make sure we stick to that smaller amount. You COULD just have one giant “extras” category but we like splitting everything up line by line based on our plans so we know exactly how we plan on spending our money for the month.
   4. If we decide we don’t have a lot we want to do with our money for the month, we’ll budget the rest into savings or to go towards the house. Either way, all of the money we make for the month will have a purpose before the first even arrives.

We know that was A LOT of information! If you have any questions please let us know!

Jordan and Stephen 🙂

Photos by Emily Ann Photography