Budgeting For Idiots

I hope the title left a little intrigued as to what the topic is for today. Truth be told budgeting is the basis for a strong personal finance plan but why don’t we do it. Here are a few reasons:

“I let the bank budget my money for me”

“My broke uncle said that until the checks are gone I have money in my account”

“My wife handles the money”

“My husband handles the money”

“We don’t make enough money to budget”

So before you catch yourself quoting the above statements get out a pen and paper and follow these easy steps to budgeting (because you aren’t an idiot).

1. List your take home income at the very top of the paper (this is the net not the gross).

2. Under your income list your most important needs i.e. food, shelter, clothing, transportation.

3. Then list all the monthly bills (divided by amount of pay periods per month).

4. Yes. Dog grooming is a considered a monthly bill.

5. After listing all the bills that have to be paid divide the rest into different areas that are considered wants i.e. vacation, eating out, etc.

6. At the very bottom (when all the bills and wants are subtracted out) the number must be $0. If it is not $0 then find a place for the amount leftover.

This is considered a zero based budget. You must be (insert tag word) Intentional about your money. Each dollar must have a name. Don’t ever let money fall into what most would call a “slush” fund. As you begin to count your slush fund you will find that not buying drinks at Sonic and 7 Eleven could send your kids to college. Most importantly remember that budgets are static. You will not get it right the first time. Follow these easy steps and by the end you will be a Budgeting Aficionado.


9 Responses to “Budgeting For Idiots”

  1. Clint Says:

    I would consider budgets to be dynamic and not static. Even though I have reoccurring expenses each month, I may want to purchase more ammunition this month, or increase the payment to “Aunt Sallie Mae” next month. I think if people keep a “static” budget and not change it to match what they need each month, then they can fall into a trap where their budget doesn’t reflect what they’re really spending.

    • Chad Arnold Says:

      I would agree with flexibility only to the point that the flexibility doesn’t justify satisfying wants. I understand that a budget will change in the short term and when life changing events come into play but the heart of the budget should remain the same as long as income is steady. We have our blow money set aside each pay period for items like ammo. If I can foresee wanting to buy more of something I save my blow money and pay for it. This helps us to have a little ownership of our own money. Of course this amount is agreed upon during our budget meetings. Of course, if income is not pre-determined each pay period then the budget has to change. This post gives a context for determined cash flow. I will include another post for commission only income in the near future.

  2. Mandy Says:

    This is a great post. I am restructuring my budget this weekend to reflect my needs for this semester and to add more to my savings so I don’t get in any more binds. Yikes!
    Great reminders. Thanks, Chad!

    • Chad Arnold Says:

      Great to hear you are being proactive. I would encourage you to find an accountability partner. Someone that will help you squeeze out all those “wants” and help you to focus on your needs. I have much respect for anyone that pays cash for higher education. Check out this link for more budgeting forms.

  3. Clint Says:

    I agree that there should be some flexibility in a budget. I don’t think a budget should be written in stone. You’re right, there should be some flexibility, but not to the point that it’s being used for frills. My biggest problem when it comes to a budget is forgetting to set aside blow money for that pay period. I say that, not only for my purposes, but as a reminder for those who are starting a budget.

    For those who are starting a budget: There are two things that create the illusion of more money in my hands: a budget and tithing. Both are important.

    Creating a budget is logical and one will find they have have better control of their money and it goes further.

    Tithing is important. Although important, it seems illogical by earthly standards. I was once told that the math doesn’t add up when you tithe, but it works. It may appear there is no money left at the end of the month, but when you tithe at the beginning of the month the money will appear! It happens all the time to me. Just remain faithful in tithing and know that God will take care of you.

    • Chad Arnold Says:

      Oh there will be a post on tithing to come soon. We put our tithe at the top of our budget and act like the money was never there in the first place. We use a direct withdrawal system that our church has in place. It is by far the best system of accountability we have found.

  4. Neko Says:

    I found your post by pure accident and it sounds like a plan to me, I am only beginning to go out into the world and hold my own, having been in school and having had the fortune of a scholarship so had to put No money forward, no debts, and was fortunate to be living at home during that time, …. so now I am looking for a job in my appropriate field and have been quite creative in finding small jobs to earn some money in the mean time… I had never done a budget before and this sounds like a great place to start but I have one question, how do I budget needs vs wants without having a regular income, even if it is not by commission?

    Thanks ! and Take Care!

  5. Chad Arnold Says:


    It is a little tougher with irregular income but is totally doable. At the beginning of each month you estimate how much you are going to make and budget from that. List the number at the top and go down each expense until you get to zero. Right now you have an excellent opportunity to boost your savings. Check out the 7 Baby Steps at http://www.daveramsey.com. Do those and I promise you will be doing great. I’ve moved to a new site though. Check out my new site http://www.conqueringpf.com. I’m not currently writing because I’m a slacker but I am posting great articles that I find from my favorite personal finance gurus. Check it out.

  6. wohnzimmer einrichten planer Says:

    Nice post. I learn something totally new and
    challenging on websites I stumbleupon every day.
    It’s always helpful to read through articles from other authors and use something from their web sites.

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