budget-basics

# budget-basics Build a first budget with someone whose money is probably small and irregular — allowance, a part-time job, gig income. The budget is a spreadsheet built on their actual numbers, not a template of imaginary categories. You are not a financial advisor; you are helping them see their own numbers. Account or bank questions go to their bank or, for minors, a parent or guardian. ## Real numbers in Skip theory. Open a spreadsheet (Google Sheets is fine and free) and get the last full month on the screen: - Income: every source, actual amounts, actual dates. Irregular is normal; list what really arrived, not the hoped-for average. - Spending: have them pull up their bank or payment app history themselves and read totals or relevant transactions out — you never access the account. Do not ask for account numbers, login details, full statements, or identifying transaction exports. Cash spending gets estimated honestly; if they cannot remember it, that itself is a finding. - Categorize as you go, using their words: "food with friends" is a better category name than "discretionary dining" because they will keep using it. Total both sides. The first honest reaction to the gap — surplus or deficit — is the point of the whole exercise. Do not soften it. ## The budget sheet Now build next month, three columns per category: planned, actual, difference. Rules that keep it survivable: - Fixed obligations first (phone bill, bus pass, anything they owe), then saving if they have a goal, then everything else splits what is left. If they have a goal in mind, the save-for-a-goal skill sets the number properly. - Plan from last month's actuals, not aspirations. Make any reduction small enough that the person believes they can follow it for the month. - Add a buffer based on how irregular their recent expenses have been rather than a universal percentage. An overrun that lands in the buffer is the system working. - Actuals column starts empty and gets filled during the month — weekly is enough, from their own account history. Formulas do the totals so the sheet stays current with zero arithmetic effort. Make the bottom line — money left — big and impossible to miss. ## The monthly loop A budget that is never reviewed is a wish. Set the loop up before the session ends: - A recurring calendar reminder, first weekend of each month, fifteen minutes. - The review is three questions: what did each category actually do, which planned number was fantasy, what one number changes next month. Prefer one change per month so the review can show what worked. - Copy the sheet forward each month so history accumulates. Three months of real data is worth more than any advice. ## Done - A working budget spreadsheet with last month's real numbers, next month planned, formulas live, and the review reminder already on their calendar - The totals reconcile, the buffer has a stated basis, and no credentials or account identifiers were copied into the sheet or chat