By Matthew Theal, CFP®

I’ll be honest with you; traditional budgeting does not work.   

It’s way too difficult and meticulous to go through your spending every month. After a while, it becomes so tedious that you just give up and go back to your old spending habits. In all my years as a financial planner, I have never seen a client successfully follow an itemized budget.   

Luckily, I have developed a much simpler strategy that works wonders for most of my clients and me.   

WARNING: If you have credit card debt or have struggled with controlling credit spending, stop reading. This is not for you.   


To create a budget, we need a few things:  

  1. Checking account with a debit card (preferably at a major top-four bank)  
  2. Credit card (preferably at a major top-four bank)   
  3. Excel spreadsheet or piece of paper and a pen  
  4. The amount of money you take home every month  

Must-Pay Expenses  

All expenses are not created equal. There are certain things that if we don’t pay for, we can end up in severe financial trouble. The typical person has most of these expenses. These expenses are easy to budget for and typically fixed. Here is a list of what I came up with:   

  • Mortgage or rent payment (this is your most crucial expense)  
  • Car payment  
  • Student loans  
  • Other loans  
  • Insurance payments  
  • Daycare  
  • Utilities (water, trash, etc.)   

Must-pay expenses are typically expenses that you must pay monthly. They are so important that if you don’t pay them, you will end up in a severe financial bind.  

Unimportant Expenses  

The next expense category is unnecessary expenses. These are the expenses that are difficult to budget for because they vary from person to person and are typically variable.   

  • Entertainment (TV, internet, cellphone, Netflix) 
  • Food (groceries and eating out) 
  • Gasoline   
  • Traveling  
  • Shopping (Target, Amazon, or Walmart)  

These are generally the expenses that are unimportant to your financial well-being and can be minimized or skipped  from month to month.   

Creating the Budget  

Now that we have an idea of the two types of expenses, we can create a simple budget. This is where you create your spreadsheet. Below I created a sample budget for a family that makes $10,000 per month after taxes and deductions (net pay).   

Simple Budget
Income $10,000
Mortgage $3,000
Insurance $250
Car $850
Daycare $1,200
Student Loan $350
Total $5,650
Leftover $4,350

Essentially, you add up your must-pay expenses and subtract them from your income. What you have is what is left over after your must-pay expenses have been taken care of. That number is what you can spend on unnecessary expenses.   

Putting the Budget to Work 

The best thing about this budget is the execution of it. Most of your must-pay expenses will be paid through your checking account. This is because those expenses typically have auto-pay features where you can connect your checking account to the biller and have the money automatically taken from your account. If you do not use this feature, you should consider setting it up, as it will save you time and can keep your financial stress down.   

Finally, all of your unnecessary expenses will be put on your credit card. You can spend up to whatever your leftover balance is on your spreadsheet. If you go $1 over your leftover amount, you have gone over budget for that month.   

At the end of the month, you will pay off your credit card and start over on the 1st with a zero balance.  

Tip: If your credit card billing cycle is on the 15th, call the credit card company and request that your billing cycle starts on the 1st of the month.   


The secret to this budget is the simplicity. I have found this strategy works wonders for most people. What do you think? Are you going to give this spending strategy a try?