If you live paycheck to paycheck budgeting can be hard, especially when you add up all your expenses and your income comes up short. I get it, like first-hand experience get it. Growing up I was never taught how to manage my money and the moment I got any, even if it was just a couple dollars, I would spend it faster than you could blink. My family struggled when I was little. We never had extra. Yes, we had food to eat, a house to live in, and clothes to wear so I can’t complain, but the reality is that growing up in an environment where money is always tight, it shapes you. Also having a mom who isn’t good at budgeting or saving means I was never taught either of those things. I love you mom, but money is defiantly your weak point. Sorry, but it’s true!
Fast forward to my college years and low and behold I still continued to live without a budget and even at times going negative in my account. Oops! Yep found that out the hard way, multiple times. If you could se me now I’m shaking my head and rolling my eyes at myself. Trust me I’ve learned my lesson, but boy do I wish I had learned it alot sooner.
After I got married it got better and I stopped going negative in my account, thanks to a husband who is the polar opposite when it comes to money. Although I wasn’t going negative, it was still a battle paying our bills and tracking our spending. That is until we implemented this easy budget system and actually stuck with it. First things first. You have to stick with it. There is no budget system out there that will magically put all your expenses and income in order for you without you keeping yourself accountable and raining in your spending. It’s the truth, as hard as that may be for some of you to hear. Luckily this budget system is really easy to use and is a great way to help you rain in your spending without costing you your sanity.
This budget system is wonderful because not only is it great to not have to carry around envelopes of cash but it works for families that are living comfortably as well as those that are living paycheck to paycheck. Unfortunately, there just aren’t budget systems that accommodate to those of us that do or have lived paycheck to paycheck, so I decided to fill the need myself. I wanted something easy but did not like the idea of having tons of envelopes of cash. For me that seemed pointless. Our checks, like 95% of the population, are direct deposited. That means in order to have cash in hand I would have to go to the bank, not the ATM because they don’t give out the correct number of each bill I would need to divide them up into each envelope. Sorry, but that’s not my cup of tea.
There had to be a better way, and I found it. So, lets jump right into my easy ‘NO CASH ENVELOPE’ Budget Binder.
- 3 Ring Binder Full Size or Half (Printables Available in Both)
- Dividers with or without Pockets (Personal Preference)
- Budget Printables
- 3 Hole Punch
STEP ONE: ORGANIZE
The first thing you want to do read through this whole post before you get started so you fully understand this budget system. Then go ahead and fill out the Yearly Bill Pay Checklist. This will give you one place where you can see all your bills, along with their amounts and due dates. Make sure and include all bills in this list, no matter how small. That includes your subscriptions like Amazon Prime, Netflix, Hulu, etc. If you have bills that are automatically deducted from your paycheck before you get it then don’t list those bills. We have insurance policies through my husband’s work and those bills are deducted from his paycheck before it’s issued to him, so I don’t worry about those.
STEP TWO: ASSEMBLE
Put your dividers in your 3-ring binder and label each divider with one of your bills, but make sure your first divider is labeled ‘Expense Tracker’. If you have bills that come with receipts or paper billing info, then I suggest getting dividers with pockets, so you can keep track of each bill’s paperwork easier.
Some examples of bills are the following;
-Tithe or Offerings
-Office (HP Instant Ink, Website, Adobe Creative Cloud, Amazon Prime, Canva)
-Entertainment (Netflix, Hulu, Pandora, Audible, Apple Music)
I have different office expenses, so I just lump them all together and put them under one divider labeled Office. I also have some that are yearly costs like my domain name and hosting for my website. About 3 months before those come due I start putting a little aside each paycheck to cover those. This will make more sense in later steps. Same goes for entertainment like Netflix & Hulu. Those are put under a divider labeled Entertainment.
STEP THREE: FILL OUT
Print off 2 or 3 Expense Tracker printables and put all of them under the Expense Tracker divider. Next print off the Bill Pay Tracker printable and put 1 in each divider section. Make sure and fill out each Bill Pay Tracker printable for each bill. For example, under the Rent divider put 1 Bill Pay Tracker printable and write Rent where it says ‘Bill’ and the day of the month it’s due where it says, ‘Due Date’ and the total amount due where it says ‘Total’.
STEP FOUR: PAYCHECK PREP
Print off the Paycheck Prep printable and write the date you will receive your paycheck at the top. Next list out all your bills. If you did an office, entertainment, or other divider that is a lump of multiple small bills then just list the bill as office, entertainment or other on the Paycheck Prep printable. Next you will fill out the portion column. If you get paid weekly your portion with be ¼, bi-weekly your portion will be 1/2, and once a month your portion will be ‘All’. Under the amount column you will divide up that bill and write the correct portion amount. For example; If you get paid bi-weekly and your rent is $1,000 a month then you will take ½ of your rent out of that paycheck, meaning you will write $500 in the amount column. If your partial bill doesn’t divide equally then round up. For example if your insurance is $205 and you get paid bi-weekly then 1/2 of the bill would be $102.50. To make it easier take out $103.
We get paid bi-weekly so we take out ½ of each bill from each paycheck. For sections that are a lump of small bills (office or entertainment) I take out what is due during those two weeks. For example; if we get paid on the 1stand Netflix is due on the 3rd but Hulu is due the 20th then I will only take out Netflix since we will get paid again before Hulu is due. I do the same thing for all lumped bills.
STEP FIVE: EXPENSE TRACKER
This section is your account ledger that keeps track of all your expenses. You treat this as your bank account on paper. Any transaction you do gets written down. When you get paid the paycheck is written down as a deposit. Then you start to deduct all your bills. Once again if you are paid weekly, you deduct ¼ of each bill. If you get paid bi-weekly, you deduct ½ of each bill. If you get paid monthly, you deduct each bill as a whole.
Once you deduct that bill from your expense tracker you deposit it into the corresponding divider on the bill pay tracker. See example above & below.
The Expense Tracker is also where you will write down all miscellaneous expenses that don’t fall under a certain divider.
TIP: ROUND UP Every Single Transaction!
This will give you a cushion in your actual bank account! So if your trip to the movies was $36.42 you will write down $37 in your expense tracker.
STEP SIX: FOOD BUDGET
This can be where it gets tricky. Most people don’t keep track of what they spend on groceries so they don’t know where to start when trying to come up with a set budget for groceries. This can be done two different ways.
- If you have a larger income to work with, a larger family, and/or know you eat out a lot then you can come up with a set amount you spend each month on groceries. For example, our family of 4 spends about $600 on groceries each month. This includes breakfast, lunch, dinner, snacks, eating out as well as snacks or drinks at gas stations. For some this may be a small budget and for some this may be a lot. Each family is different so figure out what works for your family.
- If you live paycheck to paycheck or work for commission and bonuses, then sometimes you may have $100 for two weeks to spend on food and other weeks you may have $500 to spend on food. In those cases, fill out your paycheck prep printable and don’t list food as a bill. When you get paid deduct all your bills for that paycheck and whatever is left over is your food budget. Once you know what you have to work with then you can meal plan and grocery shop around your budget. For those weeks you get larger commissions and bonuses and have a large amount left over decide how much you will spend on groceries and stick to it. Take the remaining amount and put in savings. This will help you during those smaller paycheck periods.
EXTRA BUDGET ITEMS
If you have a larger income and don’t live paycheck to paycheck you have room to add in more budget sections. These sections and items are for those random expenses that don’t necessarily happen each month. If you make a section for them it helps you plan for the future while also not overspending.
- CHRISTMAS | This season can be expensive and if you don’t plan for it, then it can sneak up on you before you know it. Depending on the number of people you buy for and when you start saving, will dictate how much you put aside. So, adjust according to your family and budget.
- CAR MAINTENANCE | Car maintenance (oil changes, breaks, filters, spark plugs, etc.) are easier to keep up with when there is money already set aside for it. Plus, you never know when something will break on your car, so being prepared will literally save your butt. Depending on the number of cars you have, year, make, model, and how much you drive will dictate how much you set aside. So, adjust according to your car needs.
- EMERGENCY FUND | Things have a way of happening at the worst possible times, so having a large sum of money to help you when crap hits the fan will give you peace of mind. $1,000 is the rule of thumb to set aside in an Emergancy Fund.
- FUN MONEY | It’s so nice to have a little fun money to spend on whatever you want, be it pedicures, a massage, or even save up for a tattoo. My husband loves to get a drink and snack at the gas station about once a week. Instead of him having to get a receipt and keep track of it he just spends it out of his fun cash. This is the only budget item we take out in cash and don’t have a divider section for.
There you go! That’s it. My easy budget binder. No envelopes, no cash to keep track of, just a simple binder with all your bills in one place. So, if you’re living comfortably or paycheck to paycheck it doesn’t matter, this budget system is for you. If you want to see where all your money is going, rain in your spending, start saving money, or stop going negative in your account then you need a budget binder. Start taking control of your finances today and go get your free Budget Binder Printables below.
Download Your FREE
'Finance Budget Binder' Printable Below!