Baby Step 3: Budgeting the rest of your money…

My husband and I are BUDGET ROCK STARS! Although I admit, he keeps track of our monthly budget because I have a very bad tendency to reverse numbers and mess things up. It’s kind of a running joke. He’ll call and ask me how much we owe on this bill or that bill…but then he always double checks when he gets home to make sure I didn’t transpose numbers. But enough about us…what about you?

How far have you come in getting organized?

Okay…no matter where you are in getting organized, this next step in your budgeting process is a bit more involved than the first two steps and may – if I’m going to be perfectly honest – incite arguments between you and your spouse. So please ENTER INTO THIS PROCESS WITH OPEN HEARTS, OPEN MINDS, and on a day and time that is convenient for you both. Make sure you’ve had a good day. Eat a nice meal together and SAY A PRAYER BEFORE YOU DIVE IN. Okay? Okay! Let’s go…

The next step in getting your financial affairs in order is to SET YOUR MISCELLANEOUS SPENDING BUDGET. This is really your discretionary spending, things that are not really necessary, but should be considered. My husband and I use the ENVELOPE SYSTEM for most of these items. (Anything that has a hash tag (#) next to it, will go into an envelope. You’ll see what I mean in a moment.)

It also needs to be said before we get into this lesson that…you shouldn’t be spending any money on these categories until you have $1,000 in your emergency fund. After that, you should spend any more than about 4% of your income on this stuff until AFTER you have paid off your debts. Suck it up. You got yourself into this mess…it’s time to dig yourself out. We did it. So can you.


Photo courtesy of


  1. FOOD: Restaurants #
  2. TRANSPORTATION: Repairs & Tires #
  3. TRANSPORTATION: License & Taxes #
  4. TRANSPORTATION: Car Replacement
  5. CLOTHING: Kids #
  6. CLOTHING: Adults #
  7. CLOTHING: Dry Cleaning #
  8. HEALTH:  Disability Insurance
  9. HEALTH: Doctor #
  10. HEALTH: Dentist #
  11. HEALTH: Optometrist #
  12. HEALTH: Medications #
  13. PERSONAL: Child Care
  14. PERSONAL: Baby Sitter #
  15. PERSONAL: Toiletries #
  16. PERSONAL: Cosmetics #
  17. PERSONAL: Hair Care #
  18. PERSONAL: Education/Adult
  19. PERSONAL: School Tuition
  20. PERSONAL: Kid’s School Expenses
  21. PERSONAL: Subscriptions
  22. PERSONAL: Organization Dues
  23. PERSONAL: Gifts
  24. PERSONAL: Miscellaneous
  25. PERSONAL: Blow Money #
  26. RECREATION: Entertainment #
  27. RECREATION: Vacation

Whew! That’s a lot of different expenses isn’t it? I bet you NEVER thought of digging that deep into your money.

This may seem tedious, I know. But let me explain to you why this step is equally as important as the first two. I mentioned that my husband and I had a pretty bad case of money diarrhea. We received our pay checks on Friday and by Monday they were gone. Poof! Just like that. After we looked at all of these miscellaneous expenses, we had a light bulb moment. It was both EXCITING and DEPRESSING at the same time.

We were spending over $400 per month on fast food.

We were spending over $500 per month at department stores (on goodness knows what?)

We were spending over $200 per month on entertainment – movies, dates, kids bounce houses.


Yeah…we were spending a ton of money that we didn’t have! So we reeled it in. We completely cut fast food out of our budget! That was an instant $400 pay raise.


We decided to SAVE MONEY FOR IMPORTANT THINGS like car repairs, oil changes, and tag renewal fees. By the way, your tags are always due in the same month as your birthday…it’s not a surprise. PLAN FOR IT.

We decided that we needed to plan ahead to get our kids clothing for the change of seasons. Let’s be blunt, unless you live at the equator, seasons change. They change the same time every year. Don’t play dumb…save your money and be prepared for the expenses that come with the change of the season. (To get a home maintenance checklist for each season, click here:

Anyway, the more you know…and the more responsibility you take…the better off you will be both financially and emotionally. Because isn’t it stressful not knowing when your next bill is due or if the call ringing through is from a debt collector or a friend?

As you go through your bank statement, write down how much you’ve been spending in each of these categories. (Your online bank account might even do this for you already.) You’ll be surprised to find where your money is going. If you smoke or drink, a substantial amount of money is being leached from your pocket to meet those wants…give them up.

In our next step we’ll talk about how to set a reasonable budget for each of these expenses. If you’re just finding my website and want to get some help with your budget, click here to get to baby step one.

My prayer for you today is that you find the courage to continue through with this process. My husband and I are launching a coaching program to help people get their finances under control. If you feel like this is too much of a task to take on alone, we would love to help you.

Sign up below and we’ll send you priority notification of the launch date! Imagine…you, DEBT FREE! It can happen!