How to Make a Budget Binder

Let’s address the elephant in the room; budgeting is a bit taboo to talk about. It’s all relative and therefore really intimidating to talk about to family, much less an audience on a blog.

So when I’ve gotten e-mails requesting budgeting tips over the years I’ve shied away from it. For starters, I’m an old school budgeter. I sit down weekly with a calculator and a pad of paper, so there’s not really any ground breaking tips here. Secondly, I’m sure SO many of you incredible systems that work for you and mine may be completely novice in regards to how you operate your expenses. BUT, I’m all for sharing so we can help one another so I figured, why not?!

I also want to preface this by saying; this is just daily expense budgeting. This isn’t how we budget for retirement or college or investments. Paul and I treat short-term and long-term expenses completely separately. I may do a post later on sharing how we prep for our future. Since that’s such a broad topic with everything from life insurance to college funds for our kids, I thought I’d start with something lighter today.

I have a budget binder. Oh yeah, old school just the way I like it! My girlfriend had this LV agenda and she said she wasn’t using it. She asked if I wanted it, “Um yes?!” and I decided to put together this system to really make good use for it. Many of you have probably heard of Dave Ramsey. I’ll be honest, we really like him but we don’t eat/breath/sleep his methods. I think like anything in life, you have to take what you like, apply it to your life and disregard the rest. Paul and I implement a lot of his steps [most of them] and then add “rules” we follow ourselves. We make our “emergency fund” a specific number and so on and so forth. The important thing is that for day-to-day expenses we like to operate off of cash. I know that doesn’t work for some people, but it works for us.

For us, little expenses add up. The Amazon app, grabbing a candle at Target, ordering a cocktail you don’t finish at a restaurant are mindless purchases [to us] that affect our budget. I’m a bit nuts about things like that. To avoid doing that, I keep envelopes [this is part of Dave Ramsey’s method] in the binder and account for what we need in each envelope. For example, say if we spend $80 a week on groceries, I know that each month I need $320 for food and we get paid every other week. I’ll take out $160 each paycheck and stick it in the envelope. Then for the next month that’s the cash I use to grocery shop. If I’m at Target and want something extra, I ask myself if I have the cash. If I don’t, I put it back. If I have cash left over in the envelopes I either apply it to a different envelope or put it in savings at the end of the month.

So what do I “envelope” budget for? We tithe online, pay bills online, give to charitable organizations online and shop for clothing online. It’s easier to keep track of and I also prefer to shop online and earn points in my account. Envelopes are more “day-to-day” purchases and impending non-essential expenses. For example, I save for Christmas, birthdays, vacation spending money and major sales in my envelopes. I take out a certain amount each paycheck for Christmas, then in November I deposit that envelope into our bank account and only use that “set” amount of money on decorations, hosting and gifts. For the Nordstrom sale I do the same, and just deposit the money the week before. Now, there can come a point where you aren’t comfortable having a lot of cash for Christmas saved and I agree. I’ll deposit the cash for something “far out” every few months and just make a note that’s how much we have for it. This may seem redundant to some, but the practice of operating off cash with random things like Target runs really allows me to not be flippant with a debit card while out and about. Examples of things I use an envelope for are: groceries, eating out, beauty services [pedicures/Sephora/Ulta], Christmas, birthdays, vacation spending money, entertainment [movies/events], errands [dry cleaning/car washes/coffee shops] and I also make them for smaller events. For example, my girlfriend is in town this week. We only see each other about twice a year, so it’s a mini vacation when she is here. I save for that so we can go to our favorite boutiques and restaurants and not feel guilty. I also keep a “pocket money” binder for him and her. This is a Dave Ramsey tip and we love it. We put money that we didn’t use in other envelopes in the pocket money envelope. If Paul wants to grab something from Home Depot or I want to grab a cute outfit for Maxi, we use the cash from the his/her envelope.

In the binder, I keep invitations for parties so I can account for future gifts.  I also keep a list of our monthly/weekly budget along with specific saving goals. Paul and I assess our financial goals yearly, monthly and every two weeks. This mini checklist allows us to make sure we are spending with our goals in mind. It also allows for flexibility. Right now, a major financial aspect is getting our home furnished. Pieces pop up on sale and so I’m able to look at the checklist and say, “If I buy this now, how am I doing with goals 1-5?”

I also keep gift cards in the binder and coupons! How many Starbucks gift cards do we get and lose?! I use these inserts and I’m able to see everything we have a gift card to. When date night rolls around I grab a few for coffee or dinner. If I’m out of mascara I check to see if I have a Sephora gift card. My in-laws always get me gift cards to Nordstrom, so I’ll check the binder before I place an order. Right now I’ve got some Pottery Barn Kids coupons I was sent in the mail, it will help when we buy Maxi a birthday gift from there.

Lastly, I keep a mini calendar in the binder. At the end of the year I write out the months of the following year and what we have “financially” each month. For example, Paul is in a few weddings this fall and our best friends are getting married in April. We have to pay for a lot of hotels/wedding gifts/showers. Things like that really add up, so we can keep envelopes for going out to eat during those weddings, wedding gifts, etc. Paul’s 30th birthday is in July so that will be a major moment to celebrate and something I want to save for. This also ties in with the invitations I put in the front of the binder. I have always found that those things tend to creep up and you could have a month where you’re having to give four wedding gifts you didn’t plan for.

So what’s the rundown?

  • Make a Binder
  • Create a Budget
  • Add Envelopes for Budget
  • Add Gift Cards
  • Add Coupons
  • Add Invitations and Save The Dates
  • Add Goals to Binder
  • Add Calendar

These are super simple tips, but I’ve found when I make it as simple as putting cash in envelopes I end up spending smarter than if I had a fancier spreadsheet. When you don’t just swipe your debit card for coffees every few days, I promise you it adds up. I like having a place where everything is laid out and I can be wise with our day-to-day purchases so that I can clearly focus on things like retirement and Maxi’s college. Thank you so much for reading! Does anyone else do the envelope system?!

Sweater: Nordstrom Rack | Desk: Horchow | Pillow: Similar | Agenda Inserts: Amazon, Amazon | Agenda: LVOther Option

Photography by: Madison Katlin

| Editor’s Note: You may have noticed yesterday’s post was removed. I chose to take it down due to extremely wavering feedback and opinions. I apologize to anyone that did not agree with the post and appreciate you all educating me. We are all here to learn and share! xo |

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55 Comments

  1. Love the inspiration, thank you! ❤️ I’m always trying to get organised so this was a great read! 🙂

    Charmaine Ng | Architecture & Lifestyle Blog
    http://charmainenyw.com

    Published 11 Jan 18Reply
  2. Alexandra Stout wrote:

    Ok yesterday posts was one of my favorites you’ve posted in a long time!!!! Sorry to see it go but I understand.
    Also love this post!!! How do you come up with your goals? Is it goals form Dave Ramsey?

    Published 11 Jan 18Reply
    • Katey wrote:

      Hi girl! Dave Ramsey shares 7 goals and so we assess those to fit our needs! They are here: https://www.daveramsey.com/baby-steps

      Published 11 Jan 18Reply
      • Amanda wrote:

        This was a good read. I may actually try implementing the envelope idea. Thanks for sharing.

        Published 16 Jan 18Reply
    • Amanda wrote:

      Bummed I missed the post. Curious what was the post that caused so much controversy ????????‍♀️?

      Published 16 Jan 18Reply
      • Katey wrote:

        It was a post on designer dupe handbags!

        Published 16 Jan 18Reply
  3. Mica wrote:

    I use the envelope system from Dave Ramsey also. It tends to help because if I have a $100 bill do I really want to break it on a $5 item I don’t really need. I also use his app which I really like.

    Published 11 Jan 18Reply
  4. Caitlin Duran wrote:

    This post is EVERYTHING!! Thank you so much for sharing…heading to purchase the items you use right now!

    Published 11 Jan 18Reply
  5. Ryann wrote:

    We’ve tried the envelope system but it gives me so much anxiety! I am Type A but I don’t have the mental or physical stamina to actually get my act together so i just let things fly. That’s worked so far in life because, aside from 4 years, my parents have covered all of my expenses (I have severe health issues and my stubborn butt worked myself into a 3 month hospitalization when I was 25, my father ended up doing very well by having great ideas and their priority is my health, so while I can’t go on shopping sprees all the time, I don’t really have a budget either). Because of this set up, on the one hand I’m pretty healthy (the priority), but I don’t have any budgeting skills and get anxiety whenever I try. But I’m going to do it! I’ve finished my masters and I’m focusing on setting up these healthy habits of cleaning and cooking and budgeting so that I can be a good example for my kids. This has really inspired me!
    http://www.holycitylife.com

    Published 11 Jan 18Reply
  6. Britt M wrote:

    I’m going to have to try this method! If you haven’t heard of the acorn app you should give it a try if you’re a debit card user. It takes what you spend and rounds up the change for you. So if I spend $19.95 on an item $.5 will be taken from my account and put into my acorn app. If you purchase online a lot or pay bills with a debit card that change will slowly be added and invested for you. You can cash it out at any time too. Just in change (and $5 a month I put into it) I already have enough for a plane ticket! It’s seriously an easy way to save from money you already have from purchases you already make with a card. Just thought I’d share! 🙂

    Published 11 Jan 18Reply
  7. Jordan Spencer wrote:

    We love Dave Ramsey and his snow ball method to getting out a debt. If we play are cards right we will be debt free by 10/2019. So often people in there 20’s get in trouble for failure to budget correctly. Thanks for sharing.

    Published 11 Jan 18Reply
  8. Kristin wrote:

    Hi Katey,

    Can you please tell me where you got your baby pink MacBook case? I am obsessed and love pink.
    thank you!

    Published 11 Jan 18Reply
  9. Jennier wrote:

    I really enjoyed this post. I also budget and try to stay ahead of big purchase events. Staying organized is key and I also used a planner to help me track everything. I have an Erin Condren planner that I use for my budget and fitness goals. When you see it written down you are so much more likely to accomplish the goal!

    Published 11 Jan 18Reply
  10. Emily Cooke-Varin wrote:

    Thank you for sharing this! My husband has been on me about budgeting and I am terrible at it! Nothing works for me! I showed him this post and he was excited for me to try this. I did tell him that the LV planner is going to be the key to my success here lol.

    Published 11 Jan 18Reply
    • Kat wrote:

      Girl, me too! Just say the Louis Vuitton is the best investment here ????

      Published 11 Jan 18Reply
  11. Stephanie Crawford wrote:

    YES girl yes! It sounds so funny because we literally just sat down after the hustle and bustle from the holidays and decided on our goals and long/short term plans. This post was perfect timing, I just made an appointment with a financial advisor because I didn’t know where to start! This is so easy and helpful!

    Published 11 Jan 18Reply
  12. Jaime wrote:

    Love this post! So do you carry your planner around with you with all the cash in it? If not, then how do you use cash for a random stop to a coffee shop, or unexpected target run, etc.?

    Published 11 Jan 18Reply
    • Katey wrote:

      Hi Jaime! I do carry the planner in my purse for running errands or I just take a $20 if I’m running errands, etc. and that way I don’t spend more! haha.

      Published 11 Jan 18Reply
  13. Juliya wrote:

    This post has me all *heart eyed* I love budgeting/saving tips – these are the hardest, but most important habits to establish. Nothing makes you “look int he mirror” more than the financial decisions you make. Here’s what I do – I use an excel spreadsheet and track every non-discretionary expense we have during a month. I don’t track each discretionary purchase here, as it would be too cumbersome and I use a different approach to tracking those. My spreadsheet is divided into 2 sections: 1- things that have to be paid within the first 15 days of a month and; 2- things that have to be paid in the last half of the month. This correlates with our paychecks as well. Based on our combined income, I set a discretionary spending amount. All discretionary spending is done via a credit card, for cash back/rewards purposes. I check the balance daily and know how close (or not) we are to hitting our monthly max. One thing to note – my monthly budget requires a portion to go into savings. Like you, any discretionary funds not spent will also be moved into savings. When I come across an expensive item I want to purchase, which either blows the discretionary budget, I will tap into savings to pay for it. Over the course of X months, I replenish the lost savings from the forthcoming discretionary budget. I like the idea of using a savings account which pays interest to save for high ticket items. I know some people who open separate bank accounts just to save for something expensive. OK – that’s probably way more info than needed, but this topic is near and dear to my heart. Thanks for sharing your tips! You’re so organized!! Best, Juliya

    Published 11 Jan 18Reply
  14. Love these tips!! Hubby and I are saving for our first house/condo, and my parents have their own way of budgeting but I’m not sure it works for us. But THIS, I can use! I like the fact that you’re able to count what you’re using daily, instead of swiping your card here and there (which I currently do, for the most part). I love to shop, so I know that planning a budget ahead of time will help me stay focused on saving for our place. Thanks for sharing, Katey!

    Published 11 Jan 18Reply
  15. Kimberly Perez wrote:

    Thanks for your post! We LOVE the envelope system and have been doing it for about two years from now as it really helps to hold us both accountable! Two great things I really took away from this post that will help me out!

    — Saving for the Nordstrom sale, that’s genius! 🙂
    — Having coupons in your planner! I keep my coupons in my home office and tend to forget them when I’m out. This is a great way to have the coupons with me and readily available!

    Great post!

    Published 11 Jan 18Reply
  16. Olivia wrote:

    Great read! As a young professional (1.5 years out of college eek!) budgeting is something I am still figuring out and trying to be consistent with. Your ideas don’t over-complicate it and I appreciate the simplicity – it seems much more doable than other budgeting techniques I’ve read.

    Also- where might we be able to find a similar acrylic chair? I didn’t see one linked. Looking for something exactly like that for my desk 🙂

    Published 11 Jan 18Reply
    • Katey wrote:

      Hi Olivia! I got mine off Amazon! Thank you so much for reading! xo

      Published 15 Jan 18Reply
  17. Sabrina wrote:

    This is such a good post. I’m encouraged and inspired, to say the least. Our church and the non-profit ministry where I work are offering Dave Ramsey’s courses this month and after reading this, I just very well may sign up. I do have a question for you, if you don’t mind answering. 😉 Being a fashion blogger how do you stay on budget and continue staying on trend?

    Published 11 Jan 18Reply
    • Katey wrote:

      Hi Sabrina!

      Of course! Sometimes it can be a little difficult when I do have a lot of events coming up and I have to purchase different looks, but I just have a specific amount each month I allocate and I really force myself to stay within that. I think keeping long-term goals in the binder helps a lot because it puts things in perspective easily that I may not have thought about when wanting a trendier piece! xo

      Published 15 Jan 18Reply
  18. I love Dave Ramsey’s method, but completely agree for doing what works for you. My husband works out of town 3 to 4 days a week, so everything is “expensed”. Cash envelopes do not work for us, but I do use the spreadsheet “virtual” envelope system to help budget for daily needs, semi long term, and travel savings. Love this “real life” post!! Thank you!

    Published 11 Jan 18Reply
  19. Yasmeen wrote:

    In a time where it social media makes you feel like people spend without budget to look effortless, this post is so refreshing! And cool! The well dressed and put together mom that is sensible and careful with spending.. love it thanks for sharing!

    Published 11 Jan 18Reply
  20. Amanda wrote:

    This was definitely a well timed post. I keep a spiral notebook of each weeks budget. I like this notebook idea . Would you share where you get the envelopes that have “eating out” on them?? If I’m seeing it correctly.
    Thank you

    Published 11 Jan 18Reply
    • Katey wrote:

      Hi Amanda! Thank you so much! They are just regular envelopes I hole punched and then used a label maker for the stickers. 🙂 xo

      Published 11 Jan 18Reply
      • Amanda wrote:

        Thank you so kindly. I get it. My dad has a label marker I’ll have to borrow, lol. That’s a great idea.

        Published 11 Jan 18Reply
  21. Leigh wrote:

    Hi there!

    Can you please tell me where you got your lamp? Love it! ????

    Great post!

    Thanks!

    Published 12 Jan 18Reply
  22. Amy wrote:

    Where did you get the filler pages/inserts for inside the agenda?! Love love loved this post! You should definitely do a post on long term expenses as well!

    Published 12 Jan 18Reply
    • Katey wrote:

      Hi Amy! Those are from Amazon! I included that in the Shop The Post section. And then for everything else it’s just regular paper/envelopes I used a hole punch with. 🙂 xo, Katey

      Published 15 Jan 18Reply
  23. Kaleigh wrote:

    Hey katey! Where did you get the envelopes that say “eating out” or “beauty services”?

    Xoxo

    Published 12 Jan 18Reply
    • Katey wrote:

      Hi Kaleigh! They are regular envelopes I used a label maker with. 🙂 xo

      Published 15 Jan 18Reply
  24. Marissa wrote:

    Katey thank you so much for sharing! Being in that stage of life with weddings and wanting to save for things like a car and a house it’s sooooooo easy to throw away money on things like “candles at Target” etc. where you just swipe your card. Looking forward to applying some of your methods this year! (Going out to get my binder so I can start tonight!!)

    Published 12 Jan 18Reply
  25. Renee wrote:

    Hi! Love the tips and system! Just starting Dave Ramsey so great advice. Question, what size is your agenda? Just thinking about weight/convenience of carrying around. Thanks!

    Published 13 Jan 18Reply
    • Katey wrote:

      Hi Renee! It is the largest size! 🙂

      Published 15 Jan 18Reply
  26. Amy wrote:

    Wow, I don’t know how I missed that! lol thank you. Also, what size is your LV agenda, medium or large? I was looking on the site to try and decide which to buy!

    Published 16 Jan 18Reply
    • Katey wrote:

      Large! xo

      Published 16 Jan 18Reply
  27. Brooke wrote:

    Where is the cool acrylic gram with you holding Maci from??

    Published 16 Jan 18Reply
  28. Bailey wrote:

    Hi Katey – I love your blog and thought this post was super helpful! Quick question – do you retain all of your receipts during the year for purposes of preparing your tax return? If so, have you found it helpful?

    Published 17 Jan 18Reply
    • Katey wrote:

      Hi Bailey!

      I keep all my receipts for work, but I don’t save them for things like groceries and personal expenses! xo

      Published 18 Jan 18Reply
  29. Allison wrote:

    Hi Katey!

    I was wondering if the envelopes came in a pack or if you had to buy them individually?

    Thanks!
    Allison

    Published 30 Jan 18Reply
    • Katey wrote:

      Hi Allison!

      These are just regular envelopes, I used a label maker on! 🙂

      xo,

      Katey

      Published 30 Jan 18Reply
  30. Meagan wrote:

    Hi Katey! Referencing this post as we prepare to establish a cash budget. Quick question – how does Paul keep up with his cash? Does he carry envelopes too? I’m trying to determine the easiest/most practical way my husband will be able to participate and keep up with the different cash.

    Published 04 Mar 18Reply
    • Katey wrote:

      Hi Meagan! So he doesn’t really like to carry cash as much so we have an envelope for him with his weekly cash and he just puts it in his wallet! And if he goes to Target to get groceries then we replenish his wallet with the grocery envelope cash when he gets home. 🙂 I hope this helps!

      Published 04 Mar 18Reply
      • Meagan wrote:

        Thank you!!

        Published 05 Mar 18Reply
  31. elizabeth null wrote:

    Still one of my fav blog posts!!!

    Published 09 May 18Reply
  32. Hey Katey! I can’t believe I missed this post back in January! So glad you linked back to it in today’s post. The fact that you and Paul discuss your finances regularly and have a budgeting system that works for you is amazing. And I love that you’re using the envelope method!

    I always like to challenge my ModMoney readers to try using cash for a specified amount of time. It is just too easy to swipe your credit card, and you lose the emotional tug of cash actually leaving your pocket. So many young professionals don’t know where to start when it comes to budgeting, so thank you for sharing your personal method!

    xo,
    Erica

    Published 09 May 18Reply
  33. Hannah P wrote:

    What size LV agenda is it?

    Published 24 May 18Reply
    • Katey wrote:

      Hi Hannah! It is the largest size! 🙂 xo, Katey

      Published 24 May 18Reply