Beginning to Budget Seriously—Suggestions?

I’m 41, turning 42 soon, married, and looking to start budgeting seriously. My wife and I have no serious debt aside from our mortgage, but we plan to do IVF in early 2025 and likely have kids in the next 1-2 years. I realize it’s time to tighten our budget.

I plan to start by tracking our spending for 2-3 months to identify which categories need work. Here are my questions:

  1. How granular should my categories be?
  2. What’s the best way to partly automate this? I prefer some reminders instead of just keeping a spreadsheet.
  3. After tracking cash flow, how do I create a budget and determine how much to allocate to each category?

Thanks in advance for any responses!

I prefer a manual approach. You’ll gain a deeper understanding of your budget by manipulating the numbers yourself. Also, keep your receipts; it helps with remembering what you spent.

I track my spending with a spreadsheet. It takes me just a few minutes each day. Start simple with your expenses, income, and savings, and add categories as needed.

To be frank, I don’t think I can sit down for an hour to do budgeting. How long do you usually spend on it in one session?

Start with categories that are important to you. Track your actual spending first, then allocate amounts for a budget based on that.

I use Quicken for automation. Categorize your spending into basics like housing, utilities, and transportation. Just get started—you’ll wish you did it sooner.