<prompt> Human: Im at a complete loss on budgeting, and thought Reddit may be a good place to get some assistance. First off, my boyfriend and I have never been good at budgeting. We have what we need and have almost always been able to have what we want... But thats without savings and cutting corners - And now we have a baby on the way mid July and need to be more responsible!I made an account on Mint, and while its useful in tracking my spending, I dont feel like its personalized enough for future budgetingtracking - hence your guys help. In addition, I dont even know HOW to make a budget... I have some questions Ill put at the end.Okay... Heres the lowdown on our finances. Between the 2 of us, we make about 4,000month FOR NOW and have since being together a few years ago. This is going to go down to 3,000month in August when I graduate college I receive VA benefits. Ill of course be finding a job around then, but with the new baby, were hoping to at least budget so I wont work until November or so.Monthly Expenses:680 Rent100 InternetCable Comcast double deal thing70 Phone150 ElectricWater230 Car Payment100 Car Insurance150 Gas50 Credit Card 400 Limit60 Pet Expenses250 Grocery ESTIMATEThis is where the rest gets fuzzy... Im not totally sure where the rest of our money goes - mostly because my boyfriend only uses cash with his job. I know we spend faaar too much on what I suppose would be entertainment. We eat out a lot, and with his job he ends up gambling and drinking during the week sidenote, this isnt an issue for us - I realize it can sound bad but he does it as responsible as one can for strictly entertainment. I tend to be an excessive spender too, but again - not totally sure on what, especially being pregnant. I buy a lot of baby stuff, go to dinner with friends, and the occasional movie I guess.Anyway, Im hoping some finance savvy person on here can tell us how much we can afford on specified things, how much we should be saving, and where were going wrong. In addition, how do we follow a budget once we have one in place? I mean, do you allot a certain amount of cash for each category? Or do you just have to intensely watch debit card transactions? By writing them down by each category? I realize these are probably simple questions that two 25 year olds should know by now, but alas, were lost.Help!TL;DR Boyfriend and I have baby on the way, hoping someone can help us set a budget and get away from our carefree financial ways  <response>: I think one of the more helpful things to remember is that, when you get your paycheck, some of that money is already spent. Technically, its in your checking account, but, really? Its gone.Start with your anticipated monthly income. If your budget fluctuates, estimate toward the lower end. In fact, start living now under the restrictions of your future lower salary expectations.Take ten percent of that number. Thats the money you keep. You dont spend it. It goes into a separate savings account. Consider it gone. Youve already made a list of some of your expenses. Thats good. Separate those into categories.Start with fixed expenses. These are expenses that never change and are completely predictable. Rent, loan payments, monthly insurance payments, phone bill, cable bill, stuff like that.Your next category is for variable necessary expenses. Those are things like groceries, fluctuating utility bills, gas, etc. For those, you want to estimate the MOST youve ever spent in that category in the last 12 months. If youre using mint, I find its really useful for this, since you can look at categories over time. For example, I allocate 100 a month for gas. I only spend 100 a month in the months I drive out of town to visit family. Otherwise, I only spend about 30. But, if I didnt allocate for an unplanned need for travel, I could find myself in a real bind. The buffer prevents any panic due to a sudden event.Now, the last thing you have to look at is big, predictable yearly expenses. Add up how much you spent total on the dog. List yearly subscriptions, like Amazon Prime. Car registration and inspection. Estimate the annual cost of car maintenance and potential repairs. Renters insurance. Moving costs. New deposits. All those big things that come once or twice a year and hit you hard. Add all those numbers up and divide by 12. Thats money youre going to put away into another account every month so when those big bills come due, you have the money ready to go. Dont mourn its loss from your checking account because it never belonged to you in the first place.So! Add up the ten percent you paid yourself, all your fixed expenses, your variable expenses, and your monthly payment into your yearly expenses account.Take that number and subtract it from your income.Whats leftover is your discretionary income. You can use it to save towards a goal, throw it at loans youre trying to pay down, or drink or smoke it away. Because if you allocate first for everything you have to pay for, then its a lot harder to accidentally overspend. 