Budgeting, Saving

How to Budget Like a Boss

Screen Shot 2017-08-31 at 10.34.54 AMLook at all those George Washingtons, and other presidents, you have ready to work for you… it’s like you have your own team of employees and you’re the Head Mutha Flower in Charge!  Every time you receive some of those greenbacks, they just sit there waiting until you give them something to do.  Your budget is your punch-list for your employees.

Some of them will go to the basic pamperings no fancypants American can do without: light on demand, luxurious climate control devices to keep our little delicate bodies from getting too hot or cold, and to powering each of our 98 household electronic devices that make our lives ‘easier’… others go to groceries, transportation, entertainment, insurance, etc. etc.

The key thing to remember is that,

YOU are in charge of your money! You decide what you want it to do, and it’s your responsibility to make sure that it does its job.

That’s the whole purpose of a budget, really… it is about you being in control of your finances instead of your finances controlling you.  So many people are scared to even try a budget because they think it’s going to be too restrictive… But, since you are the one setting the budget, it will only be as restrictive as you allow it to be.

For spouses, it IS NOT a good idea to set a budget for your family without buy-in and participation from the other party –  You have to make sure everyone is on board, and is part of the process, if you want it to work.

Your budget is the key to Stage 2: Break the Cycle.  The essentials of a budget are:

  • Step 1: List your basic expense categories (Food, Water, Housing, Electricity, etc.)
  • Step 2: List your irregular, or true expenses categories: quarterly bills, gifts, car repairs/replacement (if you are doing well on basic and true expenses, you can also add goals as categories – i.e.: vacation, down payment for house, etc.)
  • Step 3: Give each dollar a job – When you get paid, divide your paycheck into each category and decide how much of each category you are going to fund with your current paycheck
  • Step 4: Track your expenses – As you spend, your available balance in that category goes down – keep an eye on what’s left so you know how much you have remaining in your budget categories at all times

Here are a few methods to organize and keep up with your budget:

Written Budget: Write out your budget on a legal pad, which I did in my early 20s…. Virtually free, works just fine, but it’s hard to access from anywhere, and it is a very manual process.  You can also buy one like this, on Amazon

Spreadsheet Budget: Eventually, I created a spreadsheet with formulas to make my life easier.  I also used Google Docs so I could access it from anywhere.

Envelope System:  With the envelope system, you use cash only. When you get paid, you place the appropriate amount of cash into each of your envelopes (categories).  So, you have an envelope for groceries, and one for gas, etc.  You can create your own system, or you can also find these on Amazon, here.

The nice thing about the envelope system is that when you run out of cash, you are totally out… you see the impact of your spending and feel it every time you pay for something.

Budgeting Software: By far, my personal favorite of all of the methods…

  1. YNAB (Online/Web & Mobile App)- YNAB stands for, ‘You Need a Budget’ This software does everything that my budget spreadsheet never could. Unspent dollars in your budget categories automatically roll-over to the next month; or, you can move them to other categories super easily.  It automatically connects to your banks, which is a very nice feature.  It costs less than $5/month, and the average YNABer saves $600 by month two and more than $6,000 the first year. They offer a 100% No-Risk, Money-Back Guarantee and you can sign up for a free trial here.
  2. Mint (Online/Web & Mobile App) – Mint is a free software that automatically connects to your bank accounts. Transactions are automatically downloaded and you can categorize them/make notes as needed.  The software gives you the ability to setup budget categories, and track against how much you’ve spent for each.

Which Budget Software Does the BSM Family Use?

I used mint for many years, but found that it was more reactive than proactive for budgeting.  I went back to using my spreadsheet for about a year before I found YNAB.


Finally, remember that you’re going to mess up.  A budget is fluid and changing, so don’t get discouraged in the first couple of months if you have to make significant changes to your categories and amounts.  Once you do it for 2-3 months, you will get the hang of it and it will become second nature.

I’ve been budgeting, personally, for 15+ years and it has become a part of my and my wife’s routine.  You will spend less and less time as you get in your groove. So, go ahead and get started with one of the methods above and start Budgeting Like a Boss!

Next: Optimizing Your Budget


Questions for you: Have you ever used a budget? What system do you like most?  Any advice for new budgeters?  Let the Black Sheep Family know in the comments section.


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2 thoughts on “How to Budget Like a Boss

  1. I sometimes wonder if budgeting would have helped my wife and I any. We were naturally frugal and achieved financial independence and early retirement without using a formal budget of any kind. We just didn’t impulse buy anything and kept the same modest paid for house and drove and still drive older cars in spite of my being a high earner until I retired. I am certain it is a huge plus for most people and I suspect we’d have even more excess money invested than we do if we had been a little more systematic but maybe things would be exactly the same. One thing I am sure of it is a good idea that can’t possibly hurt a family in the accumulation phase of life. If it is overkill for a few, well, it still teaches you some valuable things about what your retirement life will be like. Ironically we did have to start budgeting at the end of my career just to define exactly what our spending was going to be since we really didn’t know what our spend rate was like. It turned out it was less than 25% of our income our last year of work.

    1. Happy Friday, Steveark! It certainly can work for naturally frugal minimalists such as you and your wife, but unfortunately that is not the norm in our society (yet). For folks that don’t have that frugal instinct, a budget helps them become more mindful of their spending on a regular basis. Over time, they start to realize that stuff isn’t what makes them happy, and their lifestyle begins to change as a result of that new mindset. I would say “enjoy the long weekend,” but when you’ve already achieved financial independence and early retirement, it doesn’t hold the same weight 😉 So, enjoy the day!

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