· Bright Ideas · Saving Money · The Simplest Budgeting Method Ever
Saving Money · The Simplest Budgeting Method Ever

The Simplest Budgeting Method Ever

Good day everyone! I am in San Francisco this week doing some work for BlogHer. My sincere thanks to Jordan of Fun, Cheap or Free for helping me out with this extremely informative guest post! 🙂  Happy Tuesday!   Budgeting can be complicated. Frustrating. Hard, even. When my husband I went through our tough financial time we learned one glaring fact about budgeting…Simplifying works.

When we first cracked down on budgeting, I tried everything.

At first…

  • I tried monthly budgets. (But getting a lump of money is hard for me to not blow through quickly.)

  • I tried multiple budgets. (But it was confusing and hard to track, especially if I needed one budget one month and not the next, like haircuts or vet visits.)

  • Tried using cash. (But it was hard to track so I would have no idea where it had all gone at the end of the month.)

Nothing was working long-term, so I wised up and created my own system.

Now I…

  • Break my budget down weekly.

  • Have only three budgets that encompass all our spending.

  • Use credit cards to track all transactions and pay all bills (see other reasons why here, and see how we chose our cards here)

Simplifying our budgets has – literally – changed our financial lives! Here’s a video showing how:

Click below to watch the video on Youtube, or click here to watch it online.

(Note: Be sure to watch the video first or the following will make absolutely no sense!)

The Simplest Budgeting Method Ever “How-To”:

The meat and potatoes of it all…

1. Open 7 bank accounts.

Yes, seven. This will help you organize and simplify your money more than you can imagine. Read and watch a video all about that here.

2. Divide your spending into three budgets:

1) Grocery

2) Other

3) Family

“Grocery” budget includes:

Anything you could find at a neighborhood grocery store.

We’re not talking Costco or super Walmart. We’re talking a “neighborhood Walmart”, Smiths, Safeway-type stores. They don’t have power drills and sheets for your bed, but they have most of the basic items you might need to buy on a day to day basis.

Examples of “grocery budget” items:

Food, shampoo, dog food, lotion, baby wipes/diapers, shaving cream, ziplock baggies, basic kitchen utensils & baking items, cleaning supplies, milk, basic cold remedy medicine, makeup and other toiletries, etc.

“Other” budget includes:

Money set aside for normal, regular, non-grocery expenses.

These are “want to have” items most of the time, and not “need to have” items. Once again, this does NOT include any form of bill or utility, see the next category for that. See below for more explanation.

Examples of “other budget” items:

Home decor needs, clothing, haircuts, babysitting money, piano lessons, getting the car cleaned, school pictures, lunch with friends, spa treatments, shoe repair, gifts for birthdays/showers, etc.

So where do bills, utilities, and gasoline come from? In our house, money for that comes from our family budget.

Family budget includes:

Expected, set monthly expenses involving the family, house, and travel, as well as unexpected expenses involving the family.

These are the “need to have” expenses that keeps the family running, and are NOT food-related.

Examples of “family budget” items:

Utilities (gas, electric, cable, internet), medical expenses (co-pays, medical bills, insurance), car expenses (gas, repairs, new tires, registering the car, oil changes), home costs (mortgage payment, homeowners insurance, home repairs, new water heater, new furniture, TV, or other large household expenses, etc.), family entertainment (travel, trips), etc.

See below (the bank accounts section) for how we separate all these budgets out.

3. Decide how big those budgets should be.

Click here for parameters on how much you should spend on groceries. (Click here for a full tutorial on how I save 1/2 on my groceries every month without clipping a single coupon.) For your “Other” budget here is how we decided how big that should be:

  • Pull out your detailed statements from the last 3 months that show every dime you’ve spent (spreadsheet, credit card statement, or whatever you use to track your spending).
  • Decide what will be covered in YOUR “other” budget.
  • Total up how much you spent on “other” in the first month, then second, then third.
  • Average them out (add the sum of the 3 months then divide by 3).

There’s your STARTING point….

…NOW…cut it in half.  🙂  If half seems too harsh, cut it down and start there. Make it hurt a little, it’s almost guaranteed you are spending more than you should because, well, that’s human nature!

4. Track your new budgets.

As explained in the video, an envelope is the single most effective way I’ve ever tried. Here’s a quick review of the video. You can make your own envelope like I did in the video, or you can download our free envelope printables here.

Envelope at the beginning of the month:

Broken down:

Remember…The point is that you stay within your weekly budget. However, life happens. So if you happen to go over budget, remember…NO BORROWING BELOW THE LINE! Feel free to borrow side-to-side.

5. Use leftover money wisely.

The point is to try to stay below budget each week. If it’s the end of the week and you have money left in your budget try not to look for a way to spend it. Rather, put it toward any debt, or if you’re debt-free other than a house or car, put it in your SLUSH FUND or savings accounts.

So there you go! Trust me, it’s much simpler than it looks on paper (that’s why watching the video is just plain easier). Making these simple changes transformed our financial lives and have allowed us to get out of a very scary situation…and get ahead! Adapt the system to fit you and your family. And remember, if we can do it, you can do it 🙂

Additional notes and tips:

  • If you have a long month (one with 5 weeks), you can either make the first or last week of the month longer to include the extra days, or simply divide your budget by 5 and keep all your weeks as 7-day weeks. Just do what works best for you. In our free printables we divided everything by 4 weeks to keep it uniform and simple.

  • Try cutting your budget down a little to begin with. You probably spend money that you don’t need to be spending on little things, that could really serve your family a lot better if you put it in your slush fund and put it toward BIG, long-term things.

  • Keep EVERY receipt for the month in your envelope, so if you lose track or need to return something you have everything right there.

  • If you bring home extra money in a month (bonus, extra commissions, extra paycheck that month, etc.) DON’T alter your budget! There is absolutely no need! Put the extra money toward debt, put it in your savings, or put it in your slush fund. Don’t go out and buy more groceries with it, that is noooooo fun. Be wise with every dollar you bring in.

  • You need to get creative with how you spend money on groceries. Click here for a full tutorial on how I save 1/2 every month without clipping a single coupon. Additionally, click here for lots of cheap meal ideas, how to not waste food, and more.

  • Open 7 bank accounts. “Whaaaaat?! Hold the phone! Put on the breaks! Sound the alarm!…seven accounts? Giiirl, yo’ mus be ca-RAY-zay!” Ok, maybe I am. But I will promise you something: by opening multiple accounts, it WILL make your life easier.  Watch the video below, or click here to watch it online, and click here for all the details, how-to, why’s, and info.

Once again, click here to download our free printables.


Good luck with your new system!

  • image

    Hi, I’m Jillee!

    I believe we should all love the place we call home and the life we live there. Since 2011, I’ve been dedicated to making One Good Thing by Jillee a reliable and trustworthy resource for modern homemakers navigating the everyday challenges of running a household. Join me as I share homemaking and lifestyle solutions that make life easier so you can enjoy it more!

    Every day I share creative homemaking and lifestyle solutions that make your life easier and more enjoyable!

    Read More


    Bright Ideas

    most voted
    newest oldest
    Inline Feedbacks
    View all comments