I spent a few minutes today flipping through the archives here, and found dozens of posts where either DK or I champion the merits of a well-planned (and followed) budget, but not a single post on how to write a budget.

Dave's Envelope System Explained | DaveRamsey.com

Egads! What have we (not) done?

Ok, I’m going to lay it down—a quick-and-dirty budget plan, how to create one, refine it, and make it work for you. First off, figure out how much you bring home every month. I’m talking minimum amount.  (Not the “in a good month” figure. I’m talking the bare-bones-taxes-paid-no-bonus-or-commission amount).   It’s way easier to figure out what to do with surplus than deficit, right?

Second, start subtracting big, fixed monthly items. Rent, auto payment, utilities, tithe or charitable donations, average or high phone bill estimates, debt payments, etc. Third, subtract the necessities in life (groceries, etc). Groceries, auto maintenance, cat license, that sort of thing. Use your last few months of bank statements to get an idea of what you spend in each category.

Ideally your income minus your expenses should equal zero. (Yeah, I know, you’d think that if your budget works, you’d have money left over, but that’s not how we roll when we’re trying to beat debt.) Fiddle and adjust until everything works out to equal zero by the end of each month.

Fourth, prioritize these items in a spending plan. Now that you know how much is needed for each item, work from the highest importance to the lowest, … Read More