How to Budget on a Napkin, by Ike Vest™ on YouTube. 1 min 15 s.
- Video length
- 1 min 15 s
- Time to do it
- 15 minutes
- Difficulty
- Easy
- Steps
- 8
What you need
Steps
Write your monthly take-home income at the top of the napkin. Use the amount that actually lands in your account after tax, not your salary before deductions.
Underneath, list your fixed costs: rent or mortgage, utilities, loan payments, insurance and phone bill. Write the real amount for each one.
Add the fixed costs together and subtract the total from your income. Write the leftover number large so you can see it.
Now list variable spending: groceries, fuel, transport, eating out and subscriptions. Estimate each from last month's bank statement rather than guessing.
Subtract the variable total as well. What remains is what you have free for savings, debt payoff or extras.
Add a line for irregular costs like car repairs, gifts and annual renewals. Divide the yearly amount by 12 and put that figure aside each month.
Decide where the leftover money goes and write it down: savings, debt, or a small buffer. A written decision is harder to ignore.
Date the napkin and keep it somewhere you see daily, such as the fridge or your wallet. Make a fresh one at the start of each month.
Tips and common mistakes
Round every expense up to the nearest round number so the budget has a built-in cushion.
If the total comes out higher than your income, cut from variable costs first and leave fixed bills alone until you have checked them.
Keep the napkin simple. Adding too many lines makes you stop updating it after a week.
Questions
Do I need an app or spreadsheet for this?
No. A napkin and a pen are enough to see your income, your bills and what is left. You can move to an app later if you want more detail.
What if my spending changes every month?
Use last month's statement as your starting estimate, then adjust the napkin as real bills arrive. Redo it each month so the numbers stay close to reality.
How accurate do my estimates need to be?
Close is fine. Being roughly right about your big costs matters far more than getting every small purchase exact.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
