Budget Makeover: Monthly Expenses


budget makeover

So far we’ve figured out how we relate to money and organized monthly bills.  Now it is time to figure out what to budget for monthly expenses.  This includes budgeting for groceries, out to eat, gasoline, tithing, and what we call “blow money.”

All except for tithing, this is where you can really try to cut back as a family.  Try making more meals at home and eating out less for example.  As we were saving up for an emergency fund, we were really strict in these areas.  If your budget is aggressively strict in some areas, you’ll fall into the trap of borrowing funds from other categories – this means you need to reevaluate that area to fit ‘you’.  Pick an amount that you can actually abide by – everyone is different.  You will change these amounts and that’s okay– the key is to find what works.  Remember, we’re just telling our money where to go – if you can’t seem to spend less than $100 a month on out to eat, then don’t budget for less than $100.  Do note that some habits mean you can’t fund other areas as quickly as you may like – new tools for the garage, landscaping, etc.

Game Plan:

1. Set aside money for tithing.

This is obviously a personal decision, but we figure out 10% of Jeff’s income before taxes are taken out.

2. Budget an amount for groceries

3. Budget an amount for gasoline

4. Budget an amount for eating out

5. Budget a miscellaneous amount

You need to have an amount that is set aside for miscellaneous items that don’t fall into a category.  For example, if we need to purchase a book for a study we’re doing, it comes out of the miscellaneous section.

6. Budget for other monthly expenses.
The above is all the sections we budget for in our family, but you may have other items you want to budget for, such as:

  • clothing
  • entertainment
  • medical (medicine & appointments) We use a flex spending account for this is why we no longer have it as a budget item

7.  Here’s the best part, figure out how much “blow money” you get.

What is blow money? Blow money is how much money you each get per month to spend on whatever you want, no questions asked.

For us, this is not a significant amount.  We started with each just getting $10 a month for blow money, but now that we’ve held to our budget for years and have an emergency fund, we have a little more breathing room and have worked up to $30 of blow money a month!  $30 seems like such a huge amount to me and if I really want something that cost a little more, then I just have to save up for a couple months.

It’s important you each get blow money because it’s your chance to go wild and crazy with your money.  Now wild and crazy for me usually means buying a cute pillow for the couch or something!  Sometimes, though, I do blow it on some sour watermelon gummies or a stylish top.

Blow money is also important because you don’t need permission from your spouse before you spend it.  If Jeff wants to spend it on buying an app for his iPhone, such as Angry Birds, all I can say is go for it!  I may not approve what he spends it on, but it doesn’t matter because it’s not my money to spend!

budget your money

Example Budget Numbers

Remember, these are all estimates right now and once you’ve created the entire budget, you may need to tweak amounts to get them all to match up.  We still have an emergency fund to start saving for and big ticket items to account for.   Tomorrow we will look at starting an emergency fund.

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