Building a budget wasn’t a priority in my young and single days. It wasn’t too hard to figure out how to afford my basic expenses and nights out with friends. Even after graduating college, I still had a pretty good handle on my money and spending habits. My credit rating was great and I never really stressed about much. Once my husband and I moved in together it was clear that a budget wasn’t just a recommendation, it was a necessity. Surprisingly, it was also easy to put one together! Here is step by step on how to build a great budget that you and your hubby can stick to.


Start with the 50/20/30 Rule

Budget builders know this is the best way to determine where your income should be going. 50% of your income should be put toward things you need to live. For example, your mortgage or rent is a need, you have to have a place to live. Other needs might include electric bills, water bills, loans, car payments, insurance, and maybe even phone service.

20% of your income should go toward savings. Savings could include basic savings, retirement, emergency funds, and investments. Debt, such as credit cards, would also go into this category.

30% of income gets allotted to variable expenses. Variable expenses are those that support your lifestyle but aren’t a need. These may include internet and tv services, groceries, date night costs, etc and so forth. This is the hardest category for most people to limit to 30%, but is necessary if you want to get out of or stay out of debt.


As your first step, figure out your total monthly income for both of you. Only include your take home pay, the money after all your taxes and deductions come out. Next multiply that amount by 50%, 20%, and 30% to get your spending allowance in each category. For example, if as a couple you bring home $5000 per month, multiply $5000 times 0.5 to get your 50% ($2500), then $5000 times 0.2 ($1000), and lastly $5000 times 0.3 ($1500).

Build Your Budget Categories

Start with your Needs or Fixed Expenses list. Your rent or mortgage would be first on this list. Car payments, car insurance, any loans you have, and so forth.You will also have a few things in this category that are a necessity but varies in payment each month. These will come next on your list. Start assigning the 50% of your income that you calculated. For the necessities without fixed costs, use an average for now. In our example we calculated $2500 to be assigned. So lets say that we break it up like this:

  • Mortgage $950
  • Car payment $300
  • Car insurance $125
  • Student loans $800
  • Phone bill $150
  • Electric $180
  • Water $45

You might notice in this example that the expenses add up to $50 more than what we assigned to the category. That is ok for now. In fact, it happens with a lot of young and newly married couples. We will work on fixing this later.

Now move on to your savings. If you have a 401K that comes out of your paycheck automatically, do not include that here. We will only include things that come out of your take home pay. Place your credit card debt in this category with the amount you plan to pay on it each month. Add any other savings that you have, or just qualify the remaining amount as general savings. Savings for vacations and home improvement projects can also go here. If you have high interest debt, concentrate on paying this off before you start putting money away for general savings. We will use this for our example:

  • Credit card minimal payment $400
  • General savings: $600

Lastly, list out all your variable expenses. All of these that will appear on this list can be changed by choice. This is also the category that we will steal from first in terms of money allotted. So we already know that we were $50 short in our 50% category, so we will move that $50 from here. That will leave us with $1450 left in our example to apply to these expenses. When applying costs here, start with the things that you feel you cannot live without. Then once you assign a value to those, list other areas that you may want to spend in:

  • Groceries $200
  • Cleaning supplies $100
  • Cable $80
  • Internet $100
  • Gas for all vehicles: $160
  • Hobbies $400
  • Memberships: $40
  • Dinner out $125
  • Salon costs $200
  • Gifts and other: $45

Making Budget Adjustments


Now most of you are probably looking at this and thinking that $5000 per month might be a little excessive for what you are working with. It is ok, I just used it for a nice easy number to put in our example. If you are working with less, have more fixed expenses, or have more people in your family to work with, you will need to make adjustments. Adjustments should first come from your 30% category. You will want to find areas to cut spending and go with minimal.

Try not to take from your 20% unless you absolutely have to. Your savings are more important than flexible spending. This is especially true if you are still paying off high interest debt. My only exception to this rule is once you are able to be adding a substantial amount to savings and have at least a 6 month emergency fund, then you can use some of the excess money in the savings category to pay extra on student loans, car loans, and mortgages.

Stick with it.

Your budget might change monthly, in fact it is expected. My recommendation is to sit down the last Sunday of every month and build your budget for the next one. A budget needs to be a living document. You want to use it and use it often. Record all your spending habits for the month and keep all your receipts. This will not only allow you to see if you are staying on track, but it will allow you to make adjustments for the upcoming month. Own your budget and don’t give up!

Personally, I use budgeting work sheets in my planner. This way my budget goes with me everywhere that I go and I can’t forget to record spending. My personal preference is the Happy Planner since it is so easy to add and subtract pages to. You can also use these budget worksheets for the Happy Planner or you can make your own. Some find it easier to use computerized budget tracking programs or apps. Regardless of your preference, find a method that works for you. Since implementing our budget, we have found numerous ways to cut spending and start paying down our debt. I know you can too!

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