If you live on a fixed income, budgeting your monthly expenses will help you FIRE earlier.

Many financially independent people, attest that budgeting helped them reach their goals and allowed them to retire earlier.

Knowing where your money is going is half the battle.

If you know where your money is going each month, you can find problems and solve them.

When is the right time to start budgeting?

Last month, but this month is fine too. You probably won’t get it right the first month, and that’s okay. You will eventually get the hang of things and your budget will flow easily.

If possible, run all of your monthly expenses through a single credit card or checking account. This will make things easier to track because all of your expenses are coming out of one account.

In your budget, you should include the following:

  • Housing & Insurance
  • Food/Groceries
  • Utilities (power, water, gas/heat, toiletries)
  • Car/transportation/gas & insurance
  • Health Care
  • Phone
  • Internet
  • Debts
    • Car loans
    • Student loans
    • Credit card loans
    • Other loans
  • Non-Monthly Bills
    • Car registration
    • Car oil change & maintenance
    • Taxes
    • Haircuts
    • Gifts (birthdays/holidays/etc)
    • Pet care
    • Doctors visits
    • Medicine/Vitamins
    • Clothing

Including “non-monthly” expenses in your budget will help you prepare for expenses that don’t occur on a routine basis. You can set these budgeted amount in a separate account until you actually have to pay for these expenses.

For an example, if you know your car registration is $120/year, you would divide that amount by 12 months and budget $10/month for “car registration”. You would set that $10 into an account used for “non-monthly” expenses.


If you have any debt (not including a mortgage), I recommend having a 1 month emergency fund to start with. Then focus all your extra cash on paying down the debt.

If you’re out of debt (or once you get out of debt), make your emergency fund 3-12 months of expenses.

What’s next after making a budget?

Determine where you can reduce your expenses. What can you cut out or lower?

  • Monthly Subscriptions
    • If you rarely use the subscription, cancel it
  • Water Bill
    • If you water bill is high, look up ways to lower it.
    • Fix leaky faucets, lower consumption
  • Gas bill
    • I use heated blankets in the winter to lower my heating costs
  • Groceries
    • Plan your meals and only buy what you need
    • Use coupons and find deals
    • Buy nutritious foods- usually healthier foods are also more cost effective
  • Car Insurance
    • Routinely check for lower rates
  • Internet
    • Routinely check for lower rates
  • Cell Phone
    • Find a Low Cost provider. I recommend Mint Mobile, $15/month for 3GB data.
  • Find Frugal Tips
Where to build a budget?

There are many tools that could help you budget. The most basic is pen and paper, however there are many Apps available that can help you! Here’s a few that I’ve used myself.

Once you have budgeted for 3-4 months you should have the hang of things and budgeting will become second nature and take you significantly less time.

Mrs. FFR and I have been budgeting since we’ve combined our expenses and it has helped us reach our goals faster and more efficiently.

Strive to always be under budget

What tools do you use to budget?

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