Welcome back! Now that we’ve estimated our income and expenses, it’s time to start creating the rough draft of our budget. This may seem overwhelming, but don’t worry if you’re not sure where to start. We’ve got some resources to help.
Now, we’ve written a few rough drafts in our lives. Mostly when we were in high school. The rough draft always came before the finished paper. We’d edit and edit and edit the draft until we were happy. Then, we’d turn it in and that would be it! We couldn’t edit it any more.
That’s where our budget rough drafts differ from the ones we wrote back then. We don’t have to turn in our budgets, so we can continue working on them forever. That might sound daunting, but it’s truly freeing! This gives us the opportunity to experiment and make adjustments to our budgets as we figure out what works and what doesn’t. Our budgets can always change because we ourselves are always growing and changing.
Today’s Assignment
- Look over the three sample budgets where you’ll see a list of different budget categories. We call these Envelopes in Goodbudget.
- Look back at the expenses you pulled up yesterday. When you think about your real expenses, which sample budget fits you best? Or might you want to mix and match? Remember to make room for giving — in week 3, we’ll do a giving experiment. Also think about what you might want to save for: that might be an emergency fund, or a big purchase like new tires.
- Sign up for the Goodbudget app, if you haven’t already. We recommend using the Goodbudget app for the next step.
- Add Envelope names for things you’d like to track using the sample budget as a guide. Head to the Edit Envelopes page in Goodbudget to add those Envelopes. For now, just put 0 for the amounts; you’ll work on those later. Be sure to save your changes when you’re done. Note: If you’re planning to track loans or other debts you’re working to pay off, be sure to add categories for those too, and we’ll show you how to hook those up to Goodbudget’s debt features later on.
- Share with the community of budgeters in the comments below: What did it feel like to write a rough draft of your budget? What did it make you think about?
Note for couples: Make sure that the Envelope names make sense to both people. You can also start talking about who’s responsible for which Envelopes. For example, one person might do all the grocery shopping, while the other pays the electric bill. Each person will have certain Envelopes where they have freedom to spend, as well as some where they have to stay on budget. And there might be some for shared spending, and therefore shared responsibility.
Happy budgeting,
-The Goodbudget Team
156 thoughts on “Create Your Rough Draft”
Making my budget made me think about how specific I wanted to be. Is having one Eating Out Envelope enough? Is it useful to separate it into Eating Out (with people at work), Eating Out (with friends), Eating Out (bc I was lazy and didn’t want to cook), or is that just too much information?
I use two categories, one for Restaurants and one for Work Lunch because I like to know how much I spend going out just for lunch during the week. To me breaking it down more that that is too much. Hope that helps!
Susan Norrell, I said the same thing! We consider ourselves foodies, but I can’t tell you how many times we’ve overspent on a single meal. UGH
We went through a couple of drafts, but I think we have it worked out now. I’m sure there will be tweaks along the way.
We spend way too much on groceries!
It felt good to have all my expenses down in writing. I could see everything in detail and this helped cut off unnecessary expenses.
We don’t have kids at home anymore but we do have to help them out sometimes when they have an emergency whether its a home repair or auto repair so I need to include that.
Well, I had to go with a mix up from the simple and detailed budget samples shared in this class.
I felt fear at first, because I was afraid the money we earn does not cover all our expenses. By the time I created my first draft, we used to earn less money than we do today, but our kids were not at school yet back then. Once they entered school, our paycheck didn’t cover all those extra expenses, so we needed to raise our salary (fortunately we own our own business), but this made us think of our employees, and how they might as well be dealing with their budget. Made us empathize with them very deeply.
I have gone with a very detailed list of envelopes/budgets. We have discussed and agreed all the sub categories.
I put in the main categories and then the sub categories before finding out you don’t record the main category on its own.
I cannot find a way of moving the order of the categories. I have later added some sub categories of one category and it just adds it to the end of the overall list.
I want the same sub groups Initially together, as I organise the budget amounts.
When using the app later on in transaction mode I think I will want the most used sub categories at the top of the list for ease of access/use.
Need to know I can easily move categories about.
I’m currently using an iPad and have not yet gone to iPhone.
I definitely need the detailed list because once it gets all mumbled together, it’s hard for me to see patterns and trends or narrow in on issues or separate by due dates.
This is my first month using goodbudget and the envelopes make sense psychologically, but the way they calculate throws me off because if I plan for $220 in an envelope and then I fill it to $100 with my first paycheck and then spend that $100. It puts me right back at $220, but technically, I should only be putting $120 in that envelope. So that’s going to be an adjustment for me and it’ll be an adjustment merging budgets with my husband next month, so that we can be on the same page.
Hi Rachelle – Thanks for posting! It sounds like you’re saying that you fill your Envelope — that has a budget of 220 — with 100 to start. Then, the next time it’s filled, it gets filled with 220 rather than the 120. Is that right? It sounds like you might have a scheduled fill that is adding in the full 220 budget. Try editing that scheduled fill, and adjusting the fill amount to 120, so the Envelope doesn’t continue to get filled with too much. Hope that helps!
I am using my computer and my Ipad to download this website and I am finding it difficult to fill my envelopes. I am 82 years old and have always depended on my husband to take care of our finances. But I am determined to learn (with help from this program). It may take a while but I can do it!
We believe in you, Janice! And, in case you missed it, you can find help with filling your Envelopes here: https://help.goodbudget.com/customer/en/portal/articles/1043754-step-4-fill-your-envelopes.
I don’t want a lot of envelopes because then I worry too much. I want some freedom. My hardest one is my free money because I desperately need to be able to be free but my logical brain says put it to work
I think it will make us spend with moderation, knowing we have a spending limit will give us more control over what we save and how much we can give.
I plan on using the detailed budget. Thank you so much for the sample. Some categories I hadn’t even thought of.
I am using a mix of the three samples. I have no kids at home anymore, but I am also going to school and have a student loan. It took me a bit to figure out how to arrange my payments within the ten envelope limit, but eventually, I got it. I look forward to getting my budget under control. I like the process of doing just a little bit each day. It really adds up and is a boost to my self-confidence!
Hi Tamela – If you need more Envelopes, don’t forget to use some of your 10 (Free) Annual Envelopes! You can see how to add them here: https://help.goodbudget.com/customer/portal/articles/694497
Creating a draft budget helped me get a clearer picture of where my money was going.
I spend too much money on crap we don’t need. Looking at the sample budgets made me look at what I spend more specifically. I think I need to add some envelops to my budget and see how that goes.
Over the last few months I have been tracking our budgeting needs and I definitely do think it’s a process of figuring out your personal lifestyle because different things are valued differently to each person. I think for me, one of the best things I have learned is to have a chain of command for our money. I give first to tithes/fast Offerings, then I give to my husband and I for our play money, then $25 per person for food per week, $25 for other necessities (shampoo, deodorant, makeup, etc.), then gas money, then go through all our bills. I also make sure to keep a miscellaneous category. I also have a chain of command for the saving portion of our money – first to what I call a “back-up Fund”, which is our first line of defense in an emergency (so car problems, family needing to borrow money, the just-in-case-of-life stuff), then an emergency fund (our last line of defense in an emergency), then medical fund, then goal Fund (ours is a home Fund because we would like to move), then it’s whatever is left over goes to our vacation Fund (except $36 per week goes to our Cruise Fund we’re planning on going on in 2021) and Our Rotating Fund (for big expenses like cars, etc.) Within our individual fun money categories, I make sure to set aside a portion of that money to my own “ rotating fun money”, which is for the bigger expenses just for me, and whatever I don’t use that week of the rest of my play money rolls over into that Fund. I also have a chain of command for what categories things roll over into. For example, what we don’t use that week for groceries goes into the back-up Fund. I also am definitely a believer of assigning a home to every penny. It might seem restrictive, but it’s actually a lot more freeing because that money gets spent whether or not it has an assignment so you might as well make it count towards what you really want. Also, I have become a believer of saving not just for the “just-in-case scenarios”, but also saving for fun in your life. If you have always wanted to go to Paris but never make a plan for it because you’re saving for whatever is the next emergency, you will never get there. It’s important to be prepared, but it’s also important and to live. Sorry for the massive post but maybe someone will find out somewhat useful.
Hi Brooke – Thanks for posting! I totally agree that making space for Fun is sooo important (and you’ll hear more about that as you get further in the course) because budgets are there to allow us to live out our values and have fun along the way.
I have never used an official budget…but I also never had to worry about anyone else but myself…though sometimes I’d help out family. My husband and I picked the simple budget. There was a bit of a learning curve at first figuring out the envelopes, importing transactions etc BUT once it was all in there it was great to see where all the money goes. My personal goal is to make room for myself in my spending. I tend to deal with necessities first before the wants and my wants tend to come last. I always say, “Oh, I’ll get myself something next time” but next time turns into never. It drives my husband nuts. I’m going to change that. I am going to be fair to myself and make room for fun money.
I’ve used a combination of the simple and detailed, breaking down categories when there’s a few items making it up.
Hope I can keep this momentum going 🙂
We believe in you!
This was great to be able to see and remember expenses throughout the year we would normally forget to budget for.
I didn’t have an evelope for giving. I just put that in there! thanks for the tip!
This is making me feel even more anxious than usual.
It doesn’t help when I click on a link and the computer tells me it’s not there, makes me feel like I’m even more of a fool than I thought choosing to use this way to design a budget that’ll work for me.
There are a lot of things that i didnt realize I need to re prioritize how im using my money
It have me thinking about how much I do spend
I’m trying to keep as much of my old budget as possible since it has data from several months. But I decided to take my envelopes to zero.
Looking at the amounts, I’m surprised by how much we spend on utilities.
It was overwhelming at first but once I started it wasn’t as bad as I thought.
This really made me think about my spending vs how much I can really afford to spend.
As I have a budget set up with help from my sister,( I spent too much of my money on “wants” rather than payments to everyone/ everything,) I have to monitor the fact that each envelope ✉️ for all expenses is filled and correct, no matter how small, and since it’s been a year since I began following my new budgeting practices, and I have, since my new budget was set up in July last year, I add my total income for the month at the top of my budget form template on each month, then add / write in the different categories/ envelopes ✉️ for all of my outgoing expenses ; I have paid each expense that is consistent monthly on time, which increases my credit score as well as provide a piece of mindfulness, calm and a very strong worrying about my money monthly as I can see it directly on the form(s) provided for each month of the year. I am excited to see what I can learn from this course and apply insights learnt with this class.
I set up my envelopes with some specificity so that i know where my money goes. I was thinking ‘will I have enough money’??? But that is normal (I think) from paying bills with a hope there is enough money (there always is) and any leftover is ‘free money. This has left me with little funds for an emergency fund. This will be very helpful!
We are setting up a mix of the simple and detailed versions. More detail definitely helps me see where all of our money is going. I’ll need to upgrade so I can have more envelopes, so i’ll need to add that to my expenses. 😉 We noticed we eat out a lot more than we realized!
Detailed Budget
I think its a mix of regular and detailed budget for me, I wanna see where my money goes, but at the same time I don’t spend very much.
I created a detailed budget but then decided that I would group all bills as “Bills’ rather than separate phone/internet/gas/elec/water and just spend time each quarter reviewing my plans/usage to look for ways to save as the actual bills will be the result of those efforts not what I decide to spend,
I will also lump car/petrol/public transport together for the same reason.
I think I will be more motivated to keep updating a simple budget than a complex one.
I did simple because I am visually impaired and doing detailed would take too much time and effort for me. However it felt pretty good to set a budget hopefully I can keep to what I had put them.
I always feel hopeless when I make a budget—there never seems to be enough money to cover all the things we should/need to cover. But I’m already finding that everybody—including our four kids—having the Goodbudget app installed on their phone helps them see what’s going on, and buy in to staying on budget.
It felt refreshing and like I had control while I was writing out my rough draft budget plan. It made me thin that I have to learn to manage my money better than I do now.
I feel that with this method and setup, I can more easily keep track of my money when I need to manage it. I like it. It made me think about how I will have to manage my own money someday, and this could help me.
It felt good to come up with plan, it makes me feel like I am taking steps to set up my life better when I am an adult.
I definitely can manage my money a bit better than I have been, so I feel like this will definitely help me!
This makes it easier to keep track of money and have a plan.
It was relieving to write down all my expenses instead of just winging it. It was also nice since I never really use my money on much else.
With this method i can better plan for my future and save more money.
I liked how I could see everything right in front of me. I felt in control.
Making my budget, made me realize that there’s a lot of things I should save, and budget for. In saying that I should be more cautious of my spending, and it also seems like a really good way for me to organize myself for times to come.
I can definitely relate to what you’re saying! It wasn’t until I first started budgeted that I realized I wasn’t making space for expenses that happened pretty regularly.
I felt empowered, It felt good to fell like I was taking control of something that has always seemed so out of my reach and out of control. It made me think about the future, all of the things we would be able to do once we got our debt paid.
I feel the impending reality of trying to do this. Im awful with reigning myself in but i know im making enough money to be doing better than i am. I want a new year and real progress in it.
It was overwhelming.
I liked the detailed budget the best. I like to be specific in what and how I spend my money. It’s great to finally visualize my expenses and income on paper/screen, that way all the information doesn’t get lost in my head.
I have a good amount of envelopes I think so far
It feels nice to have it all written down to see. Makes me want to save more
Having it written down helps me out.
Writing a rough draft made me better realize what my priorities are
It makes it a lot easier to manage and learn where I spend my money, and how often it is spent.