How to Build a Monthly Budget With a Pencil and Paper

I’ll admit, I’ve tried all the high tech budgeting software programs out there and failed. Miserably.

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I’ve tried to be good and keep my records up to date, stack my receipts and enter them like a good girl to get caught up each week. But it just doesn’t work for me. I’d get behind and then try to catch back up only to realize I was even further behind. It was just one more thing on my to-do list that never ended up getting done.

The best and most reliable method I have found to budget my money is a good old No. 2 pencil and a piece of notebook paper. I developed this method when I started my first job out of college and I was looking for a quick way to figure out my finances. Here’s how I make it work:


I get out a freshly sharpened pencil and a clean sheet of notebook paper. I usually keep a specific notebook just for budgeting. If you don’t want to do that, you can just use use a sheet of notebook paper or a scrap of paper, whatever you have available.


I write the month on the top of the page in the margin. I then I draw a line down the middle of the page to make two columns. Since I’m paid once a month, I write my take-home income on the top line and then list out all the bills I have to pay for the month below it. (If you are paid twice a month or more, it’s easiest to use one page per pay period). I include everything I plan to spend money on, including things like entertainment, groceries, etc. That’s the left-hand column.

I make a second column for the dates. Then I fill in my pay date and the dates my bills are due accordingly. For things like spending cash, I usually just make an ATM withdrawal on the day I get paid so that is the date I assign those transactions — although, as a PerkStreet customer, I have been using cash less and swiping the card more so I can earn more cash back.

After everything I spend and everything I earn are on my paper budget, I subtract my bills from my income in the first column to find what is leftover each month. If I get a negative number, I know I need to cut back in one or more areas that month. If I have a positive number, I add the additional amount to savings. I’ve done this for so long now, I know what my numbers are going to be each month. But if you are new to this, it’s a great way to see how much you are spending each month and make adjustments where it’s necessary.

Sometimes just getting it all in front of you in one place can be enough to help you be smarter with your money.

Once I’m satisfied with the numbers, I transfer the information to my checkbook register to keep track of my totals for the month. (Yes, you should still keep an accurate checkbook register in your checkbook to know how much money you have). I enter the amounts just like I did on the notebook paper with their corresponding dates. Even though the bills haven’t been paid yet, I know they are going to be due and have to come out of that paycheck so I go ahead and enter them anyway. I simply make a little mark when I go back and write the checks or pay the bills, so I can balance my checkbook accurately later.

Anyway, since I have money for spending cash, I shouldn’t really have to access my bank account again until my next paycheck. All my bills that are paid automatically will come out on their due date and are actually pre-recorded in my check register.

Why It Works:

I can see exactly how much I earn each pay period, what bills I’m paying and on what day the bills are due. Most of my bills come out of my checking account automatically each month so I don’t have to worry about them; I just need to make sure the money is there.

For variable expenses (things like spending cash, gas money, groceries, etc.) I have set a limit in my budget and I know how much I can spend. I used to take that money out of my account as cash — that way I wouldn’t be tempted to go back to to the ATM and over-spend. Using the PerkStreet card has changed that a little bit, but I still put the amounts I’m planning to spend with my PerkStreet card on my paper budget at the beginning of the month, and simply make sure I don’t swipe the card more than I intended to. This keeps me on track.

I realize I’m probably still the only person out there that uses a No. 2 pencil, but this old school way of doing things works for me. This is the method I have been using for years and the one I always go back to.

Sometimes the old adage is true: If it isn’t broken, don’t fix it. A pencil and paper work for me!

How do you keep your monthly budget? What software do you like best? Are you a pencil-and-paper person? Let us all know below!

About Author:

Jenny Kerr is a midwestern gal who loves yoga, her Blackberry, makeup and Apple TV. She’s a personal finance blogger at TheJennyPincher, where she shares financial tips for single ladies. Jenny is a former banker and currently works as a consultant during the day. She’s also taught budgeting in a classroom setting.

Interested in becoming a regular guest contributor to the PerkStreet Blog like Jenny is? Email the editor at

Kyle is the Editor of the PerkStreet Blog and works full-time on the PerkStreet team managing communications and public relations efforts in-house. As Editor, he writes alongside personal fiance bloggers from around the web who have also created great reputations for helping people learn valuable information about budgeting, fighting debt and saving money. His personal goal is to make sure that the articles on the PerkStreet Blog provide the most relevant, interesting and informative content about personal finance you'll find.Kyle is tasked with upholding the values of transparency, community and education that PerkStreet holds dear. You can find him on Twitter @KylePs80 or email him directly at kyle.psaty at perkstreet dot com. Interested in writing for the PerkStreet Blog? Have something you think the PerkStreet Blog should write about? Drop him a line any time.Below is Kyle's latest writing, but don't forget to visit the PerkStreet Blog Homepage to find the latest tips, news and insights in the world of personal finance from everyone who contributes to this online publication!

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