Our $51k Budget (excluding mortgage), Simple Budget Worksheet

I don’t know anyone that loves budgeting, besides some accountant type friends. but I do swear by a simple budgeting exercise that allows me to see where the money is going using broad categories. It allows me to ensure good amounts are going into investments and see areas where we can consider cutting back if possible. And it basically is a list! Keep it simple! In this simple budget we keep mortgage/rent out. The reason is that this fluctuates so much across the country. In some parts of the country a $1,000/month may seem reasonable, but in others an average monthly mortgage and property taxes could easily run $3,500/month and up!  

WHAT IS A BUDGET REALLY? (The answer may surprise you)

When I was in college I had the opportunity to work in Washington DC in The Office of Management & Budget (OMB). For those unaware, this is basically The President’s budget office. The executive branch creates its desired budget for the country and in conjunction with Congress spends our tax money supposedly on stuff most of us agree on. A budget basically becomes a road map of our priorities. Remember no family budget is perfect! I quickly realized that a budget is more than a bunch of numbers and calculations, a budget expresses your priorities louder than your words. A President can say anything in a speech, but where does he/she put the money? Same holds true for us, we can say anything, but where we place our money speaks louder. So now we know Budgets are about priorities. What are yours? And not what you tell yourself or your family. Where is your money actually going? In a way you could start backwards and reverse engineer a budget. This is precisely the strategy I am using. I’m calculating where all the money is going now. Then I can identify areas of concern or areas to cut back in. Again, Budgets communicate what your priorities in life are. If your priority in life is to look rich, then your budget should include luxury car loans, high credit card debt, a huge mortgage, etc. If your priority is to build wealth, then your budget can reflect this. “Budget’s define priorities, if your priority is financial independence, then mold a budget that reflects that higher priority.” The bottom line I figured out is that my family could live comfortably on about $40k-$50k, after our house is paid off. Housing is expensive where we live, so we are working to pay that off ASAP.  


What is reasonable for different expenses is up to individuals and goes back to priorities. Perhaps someone’s life is all consumed by the joy of Disney stuff. Maybe they want to visit Disneyland 3 times a year. If that is the case they should cut back on lower priority areas and go live their Disney Dream! Perhaps someone wants to “retire” from full time work as early in life as possible. They should cut back on everything until they have saved a million bucks. The budget should reflect this!  


I use this budget to get a sense of a couple things. One, about what do we need in order to live comfortably? Your financial goals and saving targets will be very different depending on your lifestyle. If you can live off $30,000 a year, then you really do not need a huge nest egg relatively speaking. But other folks make $250,000 a year and spend $260,000! They will need $7 million to keep such a lifestyle going. These numbers will vary depending on where you live. We live in an expensive part of the country. But we are fortunate to have what I consider reasonable health insurance costs. This is due to the large size of participants, which brings insurance costs down as risk is spread out further. We also no longer pay for daycare, which has skyrocketed over the last 20 years! I add notes in areas with comments related to potential future improvements. For example, I would like to be more like Jerry someday and get full solar power going.  


  1. I personally reverse engineer the budget to see where we can improve and it all starts with a simple list. In other words, get a realistic budget picture by first capturing where the money is going. This can be achieved with a simple list. My day to day spending habits then inform where we can make decisions to adjust. Such as, we are doing well in terms of savings, that is because we prioritize this.

  2. Automate savings towards a big purchase. If you know a big purchase will be needed in a couple years, have money automatically removed and placed in a separate account. We typically don’t have the discipline to go without automation.

  3. Watch the credit cards and online impulse buys. The credit cards are so easy to swipe and the online purchases are a click away. In our minds we justify them with the saying “It’s only $10!” Manage this!

  4. Write it down. I’m a believer in writing things down and keep it simple. My early budgets were created with a pencil and paper, how novel! There is a power to writing things down and seeing them!

  5. Coordinate with your spouse. I think there are lots of different ways couples can work together, figure out what works for you.

  6. Manage debt. Watch the debt levels and if it is getting out of control then address it head on!

  7. Use online tools and credit card tools. There are many great tools and reports that can be generated to see where your money is going.

At the end of the day I think the most important concept here is to know your priorities and ensure your budget and cash flow is aligned. Leave room for flexibility, it is hard to keep a perfect budget. Keep the long view in mind. Are you saving for the future, managing debt from the past and enjoying today?   RELATED: http://oracle.davidkanter.com/2018/10/25/print-out-this-chart-visualize-financial-freedom/

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