Budget Basics

The key to living beautifully on a budget is, well, to make a budget!

image via Digs Digs

Let me start by saying none of this is really super “groundbreaking” advice. Budgeting and saving and investment is literally just about paying attention.

I have never made a budget until a few months ago. Then and only then did I realize how ridiculous some of my expenses were. Really, the amount of money spent on dining out was INSANE and I didn’t even realize. And the meals were rarely even memorable!!! As soon as I started tracking expenses, the amount of debt we were able to pay off was astonishing. And now we are living debt free. So remember my budget tips are based on having NO bills, other than our mortgage. Yeah! Your first step should be to become debt free. No car payments. No phone payments. No credit card payments. Debt free, baby!

Morning Kawa’s Budget BASICS:

  • Tip: Create a written budget: At the beginning of each month, put your income at the top and then subtract each necessary expense (housing, transportation, day care, utilities – things you need to live on) then find how much you have leftover. I use an Excel spreadsheet I created but other people like Mint or EveryDollar apps – just use a system that works for you. Note that your budget changes every month! Christmas, birthdays, vacations, etc. make sure that’s accounted for in your budget.


  • Spending Line Items: Since I like living beautifully on a budget, I also include a budget line item for home updates/decor and a travel savings fund. I’m not into buying lots of clothes because I embrace a time capsule wardrobe (more on that later), so that’s not a line item I include but it might be for you if that’s important to you maybe you have a clothes allowance instead of home decor. But for me and my home decor budget, I only spend what I have allocated for that month and once it is gone, it’s gone. Or, if I want to make a bigger decor purchase, I need to wait until my home decor savings grow month over month. This has helped me tremendously with making sure we stay on budget and grow our investments.  I also have a monthly small “other” category that would include random household cleaning products, toys, books, movies, activities, concerts, Amazon purchases, etc. This helps me keep my ‘fun’ expenses in check.
image via Camille Styles



  • Need vs. Want: Before I buy anything, I ask myself:
    • Q1: Do you NEED it or do you WANT it?
    • Q2: If you need it, do you NEED to buy it new ?
    • Q3: Could you get it cheaper?
    • Q4: Do you have the cash in your budget to buy this? NO CHARGING!! Not even at 0%. Payments mean you aren’t debt free! And don’t forget about those investment opportunity costs, kid!
    • Q5: If I decide I do really want it and I don’t have the room in my budget this month, let’s save for it!

A $500 car payment a month is over a million dollars in retirement!

  • Big project or trip coming up? Create a line item to start saving now so you can pay cash when you need it. A budget doesn’t mean you can’t have any fun it just means you cash flow your fun and plan for it!


  • Eating Out: My achilles heel. I love dining out. The ONLY way I can budget eating out and buying alcohol is with a monthly cash allowance. I’ve tried to budget this category with my debit card but for some reason I can’t stay on track here unless it’s cash only. When it’s gone, it’s beans and rice for everyone! You might have another category that you need to have cash for. For me, it’s dining out! You might need a cash grocery budget!


  • Groceries: This line item isn’t a problem for our family in particular because I only shop at Aldi (and I LOVE it!). I save SO much shopping here – I’m talking hundreds a month!. But I am also sure to address the need vs. want questions in the grocery store. Do we need cookies? No. Do we need milk? Yes. PS It’s usually better when the three year old stays home from grocery trips.

Budget Step One: I highly recommend checking out Dave Ramsey’s Baby Steps. Read his book, listen to his podcast. It’s so motivating. It will make you want to get out of debt and retire a millionaire! Even if you don’t agree with everything, that’s ok. You might get something out of it that you wouldn’t expect. His baby steps are highlighted below and his program helps people focus on one step at a time, when usually people try to do 10 things at once.

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