Stay Connected

Thursday, March 9, 2017

A Notebook Budget

I've been asked a couple of times to show how I budget using a notebook and pen. (Renee, if you're reading, I'm sorry this took so long.) My method is probably one step up from a budget on a napkin or back of an envelope; however, it has been extremely effective for our family for over 20 years.

You can spend money on a software program, buy fancy ledgers, or just jot down your spending on a sheet of paper, and have success. A budget's success hinges on the user's diligence more than anything else. Anyway, this works for us. I've shown it to friends in person, and you may find it helpful, or find something about it that you can use, tweaking it to suit your particular needs. I am sure there are ways that I could tweak it for my own use. For now, I'm happy with how it works for us, and don't want to bother changing anything with it.

The Pros

  • A notebook budget is the "budget" way to begin individual financial planning. 
  • I use cheap spiral bound notebooks that I pick up at back-to-school sales for about 20 cents each. Each month uses one page. There are typically 70 pages to a notebook.One notebook will last several years. 
  • Uses basic math skills and a calculator, no fancy software program to figure out.
  • It is highly portable and doesn't have an "on/off" switch. I can work my budget anyplace that I can take an 8x11-inch notebook.
  • I can add new categories each month, without much hassle.
  • I like that the entire page is visible and available. It is easy to update.
  • Anyone in the family can either check the budget or enter an expenditure. No passwords required.
The Cons
  • It can look messy by the end of the month.
  • If I'm not diligent about recording expenditures, that aspect isn't accurate.
  • It requires planning at the beginning of each month, which takes me about 1 hour.
  • While I can access any of the information, to export info from the budget to some other document, such as tax forms, requires me to physically look something up and transfer that information myself. (This is as opposed to having a software program that I could access on my computer to transfer info out of and into some other document.)

At the bottom of this post is a full page from my notebook that has not been filled in with numbers. At the end of each month/beginning of a new month, I turn the page in my notebook and begin with setting up the page.

Just below, here, is the top bar from the budget page. The photo is not super clear, but I hope you can read it, as needed.

The Top Bar

Upper left -- income from the previous month (we live off of the previous month's income, plus any carry forward surplus from pervious months). For us, this includes my income, my husband's income and rent that we charge one adult child. My income can be composed of money that I earn through work, cash rebates from purchases, selling items, or gift cards that can be used in grocery or home improvement stores, that I earned through programs such as Swagbucks. A gift card to Starbucks doesn't really work well in a budget which requires expenditures in non-coffee drinking areas, although they are nice to have.

Upper right -- this is the carry forward budget surplus or deficit from the previous month. Our budget generally hovers around the income from the previous month, but sometimes, even we have unexpected expenses or reductions in income, especially with income that I earn, as that fluctuates vastly from one month to the next. I don't want us spending all of what I earn, or all of a windfall, in one month, but like to spread it out over several. With regards to deficits, keeping a running deficit only works if you have a cushion in your overall budget, like when we are saving for a new car, within our general checking account. We haven't bought that new car, yet, so that $3000 or so could be tapped, temporarily, to be repaid to ourselves, over the course of the next couple of months.

Lower far left -- the heading for the column for individual budget category carryovers + and -   I don't actually write this heading in each month (Carryover + -), because I know, myself that is what that column is for.

Lower left -- the month (this is March's page before I added the $$ amounts)

Middle -- the total month's budget is entered at the top of the middle column. The total month's budget is close to the income amount, +/- a few dollars. If the total budget is below the income $$, the surplus will be added to the Upper Right "budget surplus or deficit". If the total month's budget is above the income $$, then I will draw from the carry forward surplus from the previous month.

Beneath the total month's budget I itemize each category's budget amount, on its line (I'll get to that in a moment). *

Right -- the heading reads "spent". I don't actually write that out, as I know that is what this column is for.

So that's the top bar. There are 4 columns beneath the top bar.


Far left -- this is the carry over + or - from the previous month. This column is helpful for expenses which vary from month to month. So, if in February I budgeted $70 for electricity, but we only spent $65, I have a carryover of $5 to record in this column. That $5 is added to my monthly allotment for electricity, giving me $75 I could spend on electricity in March. Our electricity bills fluctuate from month to month, and season to season. The local electricity supplier has a wacky billing system. One month they actually visit the site to determine charges, the following they estimate (and very poorly at that). So it's very likely that my $70 or so in actual usage will be billed as $90 one month and $50 the next.

This column also allows us to save, within our checking account, for upcoming expenses, like a new water heater (this past fall, for instance). I can have a line for water heater replacement built in to the budget, and we put aside a small amount every month for this specific expense. Or, something like shoes or a new coat. We don't need new shoes or coats every month, but I can feed the savings for shoes/coats, through the clothing budget, setting aside $10 to $15 each month until we have enough for that purchase. By saving for specific expenses, we refrain from robbing something important like a new water heater, to buy shoes; but we insure that those shoes will not be put off indefinitely, and the money will indeed be there, at some pre-determined point. 

Deficits in this column are infrequent, as we try to always be prepared. They do come up, but can only be afforded if there are significant surpluses in other categories. When I am buying the year's supply of laundry detergent, as a for instance, I will buy it when I find a super great deal at Cash & Carry, in the large buckets. That alone will use up everything in the Non-food Household category. What if that is also the month that I buy a 6-month supply of bathroom tissue, as that may also be on a great sale? I will carry a deficit in that category, into the next month, to cover both of those purchases, as I know that these aren't items which we use carelessly or extravagantly, but more on an even level. And we'll be able to get back to no deficit in just a short amount of time.

Left (just under the month heading) -- this column is for the name of each category. I budget every single expense category. If something comes up that doesn't fit any of our current categories, I add a new category and include it in the budget, like when I finally got myself a phone and a bus pass. I try to keep required expenses separate from non-required ones. So, something like Home Maintenance and Repairs is separate from Design/Interior or Landscape. A repair on a household appliance is necessary. I pretty new vase or flowers for the yard are not. Whenever I am making out the budget, if money is especially tight, the required categories get the funding, and I minimize the non-required ones.

There's a category titled "Extras". I don't have a name for this category, but it covers non-required expenses like a "just because" gift to someone, or a coffee out with a friend, or I put some money in the red kettle at the holidays and I need to account for it. We also have an "Entertainment" budget. this is for family entertainment, which could include eating in a restaurant, going to the movies or a play, or paid parking for an otherwise low-cost outing, any of the above, but reserved for family stuff.

We pay for part of our daughter's phone service, so that is included in the list. I have a specific amount that I feel I am willing to pay towards their phones. When they use more minutes than what I will pay for, they pick up the rest of the tab for the year. My husband has an iphone through his work, so that phone isn't included. Our landline is bundled with internet, so those two items are on the same line.

Center column -- this column is for the dollar amount budgeted for each category. On each line, to the right of the name for the category, I write in how much money I want to budget towards those expenses. When my month's budget is set up, this column is completely filled, top to bottom. I total all of the categories's budgets and the total needs to correspond to the income in the top bar. I often need to rework all or most of the numbers to get the total budgeted amount within the income.  The pink sticky, here, indicates this is the column for category budgets.

*After developing a budget that works within our income, I put the total amount of the budget (which will be close to the Income figure) in the Top Bar, as mentioned above in Top Bar -- Middle.

Right of budgeted amount for each category -- this is where the page gets messy over the course of the month. I use this area to keep a record of all expenses in each category. As I bring a receipt into the house, I record the $ spent on its category line. I do not record individual grocery purchases, however, as I now do that online. I just track a total $ amount for each month on that line. Before tracking groceries online, I used the back of the page for details of the groceries for each month.

For any additional large expense which requires a lot of detailing, such as a major home renovation, I track the budget, expenditures, and remaining balance, for that particular category, on the back side of the page, as I did with groceries for many years.

I hope this explains how a notebook budget works, for anyone curious. Feel free to ask questions, and I'll be happy to answer or clarify anything.


  1. Hi Lili,

    Good job on the budget notebook. I have something similar but yet different and it works for us.

    First, we have a healthy amount set in each of three accounts at the bank--checking, savings and money market. We also have some set aside elsewhere in a couple of different places for retirement and other stuff. With that said, the three accounts at the bank are fed by paychecks. There is always enough there to pay the monthly bills with a little shifting around to get the best monthly interest.

    My way of budgeting is that I have a spreadsheet that has the months heading 12 columns. The rows are the monthly expenses. By 31 years of marriage I know what the rows are (and should be) labeled. Sewer, TV/internet, gas, tuition, tithing, electric, medical/dental/health, home insurance, auto insurance, prop. taxes, auto tabs, garbage, groceries, cell phone, home repair, car repair and whatever else. As a bill comes in and I pay it, that total goes into the month I pay it. If there are more than one, I add them together so each month eventually has one total. I usually print a blank sheet out and pencil the numbers in and at the end of the year, I tally and put final totals in the computer version. When it is tax time, I bring this along to the accountant and we can easily see a total if he asks for it.

    I have a separate notebook for groceries, cat stuff, health and beauty and other stuff. I created that because of you Lili! My totals for "the spreadsheet" are all inclusive but the separate notebook is to see what we spend it food only. On the evening of the last day of the month, I total those out to give myself a better understanding of what we spent for food stuff.

    This is not perfect nor does it track every cent. Sometimes we forget to add in a co-pay at the dr's office or we buy something that doesn't have a category and that isn't a problem for me. These are probably small items. All the big items and the monthly bills are added in.

    This works for us and I at least have a "budget" to compare with a lot of years worth of spending. My husband is giving the downstairs bathroom a renovation and he bought some stuff that was about $100 that isn't added into the spreadsheet but the builder who will do the windows replacement, toilet, sink, fan, tiling will be put into the spreadsheet. I might add it in yet but that isn't an issue for me. It's only a guideline.


    1. Hi Alice,
      There are occasions when I forget to enter something small. I don't worry about those small items, as 1) we have a cushion in our accounts that will cover anything like that, and 2) I also don't include the small amount of interest income that our savings and checking accounts earn each month. Those amounts will add up, and help offset anything that I've forgotten to log into the notebook. If I were a business, then I'd be extremely careful with all expenses and income, as I would need to be for taxes. But our written budget is intended to keep us on a saving track, not to prove our numbers for tax purposes. I think that is why I am satisfied to keep a budget in such a rudimentary manner. As I said, a notebook budget is probably just one step up from keeping a budget on the back side of an envelope or on a napkin. Ha ha.

      I can't believe that I inspired someone to do anything!!! I'm not sure if that is a good thing or a bad thing, though.

      I hope that your day is off to a great start, Alice!

  2. It's always interesting to see how others do their budget/money management. My system is also in a notebook and similar in some regards. I use a notebook for my planner as I have mentioned before, using a loose interpretation of the bullet method. My budget is also in this notebook on a set area of pages. That way it's always with me to work on as long as I have my planner in my purse (almost always). I have one main page where I do a general budget at the beginning of the year. Then I break the other pages down by paydays and what should come out of each, normally fitting four per page, each in one quadrant. I write the actual amount paid to the right of the budgeted amount. However, though I'm good about doing this for the "bills", I'm bad about doing it for groceries and such, plus there isn't a lot of room to write in several separate grocery totals. So maybe I need to rethink this. I have started saving my receipts in one of those plastic wallets designed for filing coupons, so maybe just keeping each month's together and entering the total at the end would suffice.

    1. Hi Cat,
      If one of those transparent envelopes fits in your purse, that would be an awesome way to save receipts. I may give that idea more thought. For now, my receipts get shoved into my purse, to be retrieved when I get home. But that isn't the best way to keep them all. Once I am home, I log the amounts, and file the receipts. I hang onto receipts for several months, then go through a large batch and see which ones really need saving. I have wanted to change that but just haven't gotten to it. It's a process, right? We refine areas when the need is great enough.

      Have a lovely day, Cat!

  3. I follow the same principle. Then all month I write down every expense and at the end of the month I categorize them. During the month I keep a running mental tally, because the set bills are one time things. I keep a tally of those "out of pocket" expenses next to the budgeted and have a column for actual. Then I have a sheet where I add these to the annual.

    1. Hi Busy Bee,
      It sounds like your system is very effective for tracking everything, month to month, and annually. The only annual assessment I have is in the carry forward surpluses or deficits. An annual page might be helpful to me.
      Have a wonderful day, Busy Bee!

  4. Hi Lili,

    Thank you so much for such a detailed post. I've just been keeping my receipts in my wallet to keep track of my expenditures (which hasn't been working that well...imagine that :) I'm noticing that it's difficult to see if I'm over budget, if I'm not budgeting ;) I'm going to use your notebook example and fill in my categories. Thanks again for taking the time and making it so clear. Renee

    1. Hi Renee,
      You could also just start small, like keep an actual budget for groceries and household items. Those are the items that seem to get away from me, if I don't track them. I hope my post was helpful, and sorry it took so long to put together! Feel free to ask about anything I didn't make clear.

      Have a great day, Renee!

  5. I am probably the outlier on this one, as usually the case. I don't keep a budget, and never have in all our over 40 years of marriage. I know the ballpark numbers for what our "nut" (total expense) and income should be. I keep detailed records of all facet of spending down to the penny, first on a loose folder paper to record receipts and miscellaneous cash spending as it occurs. I record the date, where I spent (store or person), method paid (amount paid as cash/gift card/store points under one column, and credit card -never debit card- under a different column to reconcile against credit card statements), and on the other side of the paper I list the spent amounts under three basic categories (food/gas/other columns). Sometimes, a receipt may have a combination of cash/giftcard/store points and credit card for food and some items of clothing all on one receipt for example.) At this point, I just want to keep track of receipts in a timely manner (comes handy at tax time). When we worked, I kept one for personal, and a separate one for business. From this, I create other worksheets that more finely detail what the expenditures are. I tailor the spreadsheet according to what I want to know. Right now, I need to know how much to be reimbursed for my father's expenses, as well as other discretionary categories that I would like to monitor (spending too much lately?? or doing great!!) I list the item specifics down to the level of detail I need, for example my food spreadsheet lists date/store/item description/quantity in weight/price paid including tax and discounts, just as it appears from the receipt. From this, I create a unit price worksheet that I keep in my purse while shopping, so there is never a guess what my best price per ounce for a particular food item is. Everytime, I can beat the last best price, I pen the change on my unit price list, and every so often record the changes on the computer spreadsheet and print up a new list. I keep track of rebates and further discounting separately, and this credit appears on my annual expense spreadsheet as a negative line item. On my annual expense, I merge the fixed and discretionary expenses, as well as record my father's reimbursement and any stray income like credit card rebates, store points earned from a purchase, and cash awards which both appear as negative line items to offset expenses.

    My record keeping evolved because I didn't want to spend according to income, instead, I wanted to spend as little as possible, no matter what the income was. I call this "zero spend" although in reality it really isn't. But the magic is by telling myself zero is the goal, I have single mindedly tweaked our frugal habits daily to challenge myself to cut our spending further. It doesn't mean we never spend on what we believe are good investments or important to our health and safety, just that when we do, the spending is intentional. But by having a dollar amount set aside as in a budget, I believe it entices me to spend, rather than discourage.

    Again, this is just what works for me. Everyone needs their own framework that addresses their situation.

    Have a great evening!!


    1. Hi YHF,
      For our first 9 years of married life, we did live with the intention to spend as little as we could possibly get by with, in order to save for a house. for the most part, this worked for us; however, some times that mindset left us feeling "poor" and so we would spend frivolously in areas that we really don't now. It wasn't sustainable for me.

      Having a budget does "encourage" us to spend a little in all areas., and enjoy that spending. For my circumstances, that is a good thing. If I have a budget that allows me to spend $10 on drinks at Starbucks for my daughters and I, once every 2-3 months, then I look forward to these occasions, knowing they will happen, instead of feeling resentment that we can't ever afford little luxuries. The other way was like crash dieting, for me. I felt deprived a lot of the time, when I was seeking to spend as little as possible. And as a result, I would "binge" by spending a lot in one fell swoop. That binge would leave me guilt-ridden, which would take away the enjoyment, leaving me feeling deprived and resentful again.

      I did discover that when push comes to shove, I am capable of living an extremely spartan lifestyle, for bursts of time. We could do it again, if we had to.

      But as you said, we do all need to come to our own conclusions about our finances. Otherwise, the lack of having a choice causes resentment, just in itself. Feeling that it is our choice is what makes living frugally not just bearable, but enjoyable.

      Have a wonderful day, YHF!

    2. I did feel deprived when I was forced to save, but funny when it is a choice to live so spartan, we find it is like a challenge and don't mind it as much. We always ask ourselves if there is anything we really want, because at our age we are not going to deny that. But the answer is always nothing. Not even more travel or fine dining. The simple pleasures and being frugal is enough for us. Now when one of us is no longer here, or as the years advance, I know we will not be as frugal. We may need to depend on more ready made meals, and pay for more services. At that point, I am not going to care about keeping track of our expenses.



Thank you for joining the discussion today. Here at creative savv, we strive to maintain a respectful community centered around frugal living. Creative savv would like to continue to be a welcoming and safe place for discussion, and as such reserves the right to remove comments that are inappropriate for the conversation.


Be a voice that helps someone else on their frugal living journey

Are you interested in writing for creative savv?
What's your frugal story?

Do you have a favorite frugal recipe, special insight, DIY project, or tips that could make frugal living more do-able for someone else?

Creative savv is seeking new voices.


share this post