Creating A Budget

Part 1:  Variable Expenses

Budget is not a comforting word for some families.  Some might feel trapped or stressed or even afraid of that word.  Maybe it’s been a while since you took a serious look at your finances, or maybe you’ve tried a budget many times and failed many times.  Discouragement may have settled in a long time ago.

There is always hope.  The hard part is to keep trying – believe me, I get that.  Over the next few months we’ll be looking at building a budget because it is so key to financial success for your family.

The first step is to start tracking and listing your variable expenses – those that seem to change all the time – food, gas, clothing,  entertainment, etc.  Keep all your receipts and start making a list of what you’re spending each month.  Also keep totals for things like utilities, gasoline and car maintenance.

For our family’s variable expenses, I simply keep a hand-written list going.  (See the list included at the end of this article.)  After I’ve done some shopping, I grab the calculator and update the totals.  Sometimes I have to break down the receipts into different totals because I’ve bought food items and presents and hygiene items all at the same store.  Tracking receipts gets easier with practice!

You might learn a lot about your spending habits.  The point is to become aware of where your money is going and communicate openly and honestly about your spending within the family.

Next month we’ll look at fixed expenses, and I’ll share with you how my husband saved us $700 a year in one afternoon.  Together we will slowly but surely learn the basics of  budgeting.  Then we’ll build a budget that will help your family accomplish goals and realize dreams.

Our family’s variable expenses:

  • Utilities
  • Presents
  • Long Distance
  • Entertainment
  • Cell Phone
  • Kid’s Activities
  • Food
  • Postage
  • Gasoline
  • Books, Magazines
  • Car Maintenance
  • Office/School Supplies
  • Household Items
  • Dental
  • Haircuts
  • Hygiene
  • Clothing /Shoes
  • Medical
  • Dry-cleaning

Part 2: Fixed Expenses

I know it can be hard to find the time and motivation to focus on a family budget if you’ve never done it before, but believe me, it is well worth the effort!

This month we’re looking at fixed expenses – things like mortgage, phone, insurance, etc.  The amounts for these expenses don’t fluctuate much from month to month.  (See a list of our fixed expenses in the right column.)

Write down your fixed expenses and the amount you spend on them every month.  If any are prepaid write down what day they are deducted from your bank account or credit card.

Now it’s time to play a game.  Pick one of your fixed expenses (for example – car insurance) and see how much you can lower it by shopping around a little.  My husband saved us $700 per year in one afternoon last fall.  He took our car insurance contract to a few local insurance companies and gathered quotes.  We picked the one with the same coverage but lower payments.

And by taking the leap to cancel cable and switch phone/internet service providers, we enjoy a savings of $65 per month.  That   savings alone more than covers a week at Family Camp next summer!

Prioritize.  Sort out what you really need and what you can live without.  Turn the money you save into family memories.

Next month we’ll look at tracking your income and making sure the money going out is less than the money coming in.

Our family’s fixed expenses:



Water Heater


Insurance – Car

Insurance – Home

Insurance – Life





Part 3: Income

So far we’ve listed all the money that is going out of our households – our variable and fixed expenses.

Maybe that was a bad-news-first scenario for you, or maybe you are doing better than you thought.  Either way, you should have a good estimate of how much money is going out every month.  Be encouraged that you are taking some great steps in developing a solid plan for money usage in your family.

Now let’s keep going with the momentum and figure out how much money is coming in every month.  Hopefully this will be good news for you!

Write down all the income that comes into your household and the dates the money comes in.

Record your net income (take-home pay after taxes).  Also record any baby bonuses or other supplemental income.

Be as accurate as you can.

If you have automatic deductions from your paycheques, double-check you have recorded those amounts and the dates they are deducted in your expenses.  Then make sure you add them to your income totals so you know exactly how much money your family is making.

You need a really accurate picture of your money situation in order to gain confidence, realize any areas that are out of balance, and bring a budget together that will be a blessing to your family.

Part 4: % Allocations

Let’s wrap up our Creating A Budget series and move on to living out the budget!

We’ve mapped out our variable and fixed expenses and the dates they are deducted from our accounts. We’ve calculated our income and when we are paid each month.

Now we need to figure out what percentage of our income should be allocated towards what expenses. You will find that some of your expenses are definitely out of whack in terms of what percentages are recommended. You can bring your budget in line over time, or choose what you will sacrifice from one category so that you can have more room in another category.

Here’s the breakdown for a $45,000 income household according to Crown Financial – this is a GREAT resource!

Tithe 10%

Housing 32%

Food 13%

Auto 13%

Insurance 5%

Debts 5%

Entertainment/Recreation 6%

Clothing 5%

Savings 5%

Medical/Dental 4%

Miscellaneous 7%

Investments 5%

Click here to see % for other income levels.

Your task is to calculate how the current amounts in your budget categories line up with the recommended amounts.

Here is a blank budget worksheet to record everything we’ve been talking about in this series:



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