How to Save Money » Budgeting

How to Budget – Use a Budget Binder

How to Budget – Use a Budget Binder

Make a Budget Binder for Budgeting


Do you want to learn how to budget? January is the perfect time to start budgeting and tracking spending for the coming year.

This post addresses organizing the paper trail to track your spending, rather than the budgeting process itself. The budget binder has worked well for our family for the past few years because of its simplicity. I hope it works for you as well.

Benefits of Using a Budget Binder

  • Provides one central location for all financial documents
  • Quickly find receipts – if an item is defective, goes lower in price (bring in your receipt to get a price adjustment) or if you decide to return something
  • Easily track spending all year and avoid money “slipping away”, unaccounted for
  • Tax time is a breeze with each receipt/expense already categorized.

How we Use our Budget Binder

First, we decided how to allocate our spending. We tracked our spending for a few months to create a realistic budget. I created a spreadsheet to balance our income with our fixed and variable expenses.

Fixed expenses include mortgage payments, property tax, utilities, insurance (car/house/life) and savings (RRSP, RESP). These items tend to remain consistent throughout the year.

Variable expenses include spending that we have more control over – and can increase or reduce as we see fit, such as groceries, clothing and entertainment. This article focuses primarily on tracking my family’s variable expenses, including:

  • Vehicle – Gasoline, Oil Changes
  • Entertainment – Coffee, Drive-thru Snacks, Dinner Out, Movies, Music Purchases
  • Fun – An Allowance for the Adults, Guilt-Free Spending, Books, DVD Purchases
  • Groceries – Food, Cleaners
  • Health/Personal – Supplements, Prescriptions, Haircuts, Drugstore Items
  • Household – Home Maintenance Items, Small Household Purchases
  • Kids – Baby Supplies, School Expenses, Clothing, Outings, Babysitter
  • Miscellaneous/Gifts – All Gifts for the Year and other Miscellaneous Items

Note: I also have a category called Income Tax for filing all receipts for charitable donations and child fitness tax credits.

Our budgeting system has three components:

  1. Budget Binder – Holds sheets to track spending
  2. Dividers with Pockets – One for each category of variable expense (holds receipts for the current month)
  3. Accordion File – Holds receipts and bills for the entire calendar year, for both fixed expenses and variable expenses

Note: If you choose to use a program or app for tracking spending, the budget binder can still help organize receipts.

We record what everything that we purchase. We try to do this step every day. It is our version of the infamous “cash jars” (thanks, Gail Vaz-Oxlade!), without using jars (or cash, actually!). We prefer using our no-fee debit cards, instead of carrying cash around.

How to Use a Budget Binder

  • Record all purchases in the proper category.
  • Tuck the receipt in the pocketed divider.
  • Subtract that purchase from the monthly total so you know how much is still available to spend. It is critical to keep this form current. Also, all spenders in the household should look at the updated totals before making further purchases.
  • We discard any receipts that are not needed, and put the rest in an accordion file. This is also when we reflect on our spending for the month and make any necessary adjustments moving forward.


Establishing a simple accounting/storage system and using a budget binder has been a valuable tool for our family. We have a greater sense of control over our spending because of the way we have organized our finances. This frees us up to focus on important short-term and long-term financial goals.

Be sure to read Cassie’s article on also saving regularly into a yearly expenses savings account for items that aren’t regular expenses — it is a critical step to enable you to keep this regular budget balanced.

Do you use a budget binder? How do you keep track of expenses?


  1. Dawn

    THANK YOU!!! I wish I could make that larger lol, I am defiantly gonna give this a shot! Always wondered how others put it together!!

    • Karen

      I appreciate your ALL CAPS enthusiasm!! It sounds like you are a visual person, like myself. I wanted to include the pics so people could actually see our system in action. I hope it works well for you.

  2. Dien

    Wow this is a really good post! I really like the way that you have your categories it makes alot of sense. I was doing the basic groceries, gifts, gas, entertainment and clothes budget and it wasn’t quite working for us. Just wondering where you picked this binder up? I have a note book but no fancy pockets for the receipts.

  3. Virginia

    This is a great idea! Im going to start one this week! I really want to be more frugal and save a good amount of money this year. Im using a small file folder and saving $50 per week for things like my kids birthday parties, trips and hosting holidays. I also buy lots of gift cards during the summer for grocery stores and restaurants. My husband works construction and sometimes winters can be difficult financially so I save the gift cards for winter. We are terrible at saving money but I hide the gift cards. We are both determined to turn our finances around and are finally on the same page about how to do it. Starting a budget binder is a perfect way for us to keep track of our spending. No more denial. Thank you so much for your web site. I saved thousands of dollars last year using coupons and shopping some really good sales!

    • Karen

      You have a unique budgeting challenge with seasonal work. I love your idea of hiding gift cards (sounds like something I would do!), just as long as you can find them again. I am glad you have benefitted from Cassie’s website and I am thrilled to be part of her team. I wish you all the best with setting up your budget binder. It has worked well for us because of its simplicity. Try to get it set up ASAP so 2013 will be off to a great start. Karen

  4. laura

    Do you have a printable for the page to track what you spend and whats left?


    • Karen

      I will see if Cassie can add a link to this. Thanks, Karen

  5. Karen

    I love it! We have been doing it kind of loosely and do find that we can’t explain away all the cash used at the end of each month or find a receipt we need. So glad someone asked about the great idea you had on the colored pocket dividers. I find this KISS approach to this daily problem is the one that will continue over time to work for us.

    I am stoked to get this set up for our home and peace of mind.

    Thanks again!

    • Karen

      You are right – it is the bits of cash here and there that can slip away if we don’t track everything. Hope this works for your family too. In a complex day and age, you can’t go wrong with keeping it simple.

  6. Heather B

    Wanted to say ‘thank you’ for the budget binder idea. My husband is even enthused about it. I told him we’d need to track any receipts the day we get them – not wait until the weekend and procrastinate – and he’s been the one reminding me to do it. Wonderful!

  7. Karen

    Teamwork is a beautiful thing when we can hold each other accountable. And when no one is accused of nagging…it’s simply glorious!

  8. Ann Vaccaro

    I enjoy Gail’s show and money ideas! This binder is ideal! Thank you so much for getting people on track and out of debt!

Leave a reply

Your email address will not be published. Required fields are marked*