Don’t Neglect These 4 “Walls” of Budgeting Your Money

Home/Budgeting/Don’t Neglect These 4 “Walls” of Budgeting Your Money

Budgeting isn’t always easy. The process can be simple and understood by anyone, but implementing and sticking with it can be hard. This is especially true if the numbers are tight in your budget. There are four categories – the “walls” of your budget structure – that should always have the top priority. Make sure you have these covered before allocating amounts to anything else.

Don't Neglect These 4 -Walls- of Budgeting Your Money

Why bother budgeting?

Almost half of Americans cannot handle an unexpected $400 expense. Almost 80% wouldn’t be able to deal with a $1,000 unexpected expense without going into debt.

While there are true emergencies that are unexpected, a lot of “unexpected expenses” can actually be planned for. That’s what a budget is for.

A budget allows you to tell your money where to go instead of wondering where it went. – Paraphrased from Dave Ramsey

Almost 90% of people with a plan for their finances – the cornerstone of which is a budget – state that they are making progress toward their financial goals.

Budgeting is the base of good financial practices.

The four “walls” of a solid budget

During our financial coach training and certification process we got to spend some with Chris Hogan (great guy!). One of the things he talked about was what he refers to as the Four Walls of Budgeting.

These four categories should be covered first in any budget. If money comes up short at the end of the budget planning process, something other than these four areas should get cut.

So if you are just starting to build out your budget, or you have a budget but are experiencing some challenges with it, move these four areas to the top. Top priority. Top of the budget form. You need to pay these before anything else.

#1 Housing Expenses

You need a safe place for you and your family to live. Mortgage and rent payments are often the largest item in a family’s budget. Because of this some people think: “If I skip this one big item I can pay off several other bills, isn’t that better?” No – it isn’t! Don’t do it.

It’s hard to focus on goals and priorities when you’re worried about your house. You don’t want to get evicted or foreclosed upon.

Karla and I support the local homeless shelter. As part of that support we sometimes hold classes on financial topics to help people get back on their feet. We’ve seen firsthand situations, and heard of lot of stories, of what is is like to lose a house. It’s a situation to avoid if there are any reasonable ways to do so.

* With NO mortgage, I still have these housing-related costs
* Cost of living: How it impacts your financial goals
* Guest Post: Why We Left Suburbia for Life on a Hobby Farm

Don’t forget the utilities

Beyond the mortgage or rent payment, you need to cover your utilities. Sure, perhaps you can live a while without electricity or water, but not long. And it won’t take much time at all before it starts to impact other areas of life – like your children, or your job situation and more.

Having a safe, fairly comfortable, secure housing environment is important and needs to be the first budgeting wall to establish.

Tip: If you own your house you might be able to refinance to save some money on the monthly payment and/or be able to pay off the mortgage faster. It’s definitely worth considering.

#2 Grocery Expenses

You can’t not-eat. You need food (and water) to survive. This is an area you cannot neglect. It’s literally a life-or-death type of expense and you need to include it in your budget.

Just like having a safe place to live is important, you need to make sure you and your family are nourished.

Sure, food can be expensive. But it doesn’t have to be.

There are people who spend several hundred dollars per person per month on food, but there are also people who spend as little as $50/person per month. If money is tight this is often an area where you can save a good bit. You might need to live on a healthy rice and beans diet for a while, but that’s okay to make the budget numbers work out.

Tip: A few good ways to lower your grocery bill are: 1) Buy generic. Rarely can we tell the difference but the price is frequently 20% or more less! 2) Plan meals around sales. See what is on sale at your favorite store then consider working the mean plan around sale items. 3) Use coupons or apps. Everyone has heard of coupons, but there are also apps to help save money. We shop at Walmart when we can and always use the SavingsCatcher app to get cash back.

Saving More Money at Walmart Without Changing Shopping Habits
More than half of shoppers check Amazon first

#3 Transportation Costs

You need to get to work and you might have kids that need to get to school. Transportation isn’t optional.

I’m not only talking about car expenses – though certainly they need to be in this category. If you don’t own a car you still need to cover transportation. Uber? Bus fares? Whatever it is, make sure you have that included in your budget.

Being able to get to work, the grocery store, doctor’s visits, etc. is important.

Sometimes you can rely on help from friends and neighbors to get around. This is an excellent solution short term but often has challenges after extended use.

What expenses if you own a car?

Gas of course. Insurance too since that is required in all 50 states. But also budget for regular oil changes and maintenance. Neglecting regular maintenance is the top reason vehicles wear out sooner than they should. Keeping up with needed work on a car is much cheaper than having to buy a new car every few years!

7 Important Car-Buying Tips
* Three Budgeting Tips to Help Get You Started

#4 Basic Clothing

This tends to be a rather flexible category, but still an important one. If you have kids you know that they either ruin or out-grow clothes on a regular basis!

Yourself and any other adults in the house also need to make sure you have appropriate clothes for work any other situations. Personally I can wear shorts or pants until they’re frayed along the edges – or until my wife makes me throw them out. Even with an extended life for some items, at some point you’ll need to replace some clothes so you need a basic budget to cover this area.

Tip: My family has had really good luck at Old Navy and Target. Yeah, Target, how about that? I never would have guessed a few years back but they have a decent selection of both men’s and women’s clothing now. Two other great options are Goodwill or local consignment shops. Here in the Charleston area you can find really nice items at secondhand stores. These different options are worth checking out for sure.

Want free budgeting spreadsheets?

Get Dave Ramsey's forms in spreadsheet format sent to your email...

Powered by ConvertKit

Beyond the walls

Once the four walls are covered you can start moving on to lower priority items. Debt payments, if you have any, would likely come next on the list. Health insurance and other medical costs, education, etc. List everything in order of priority.

My friend Tim Maurer say that maintaining good finances is an exercise in ruthless prioritization. And he’s right!

“Maintaining good finances is an exercise in ruthless prioritization.” – Tim Maurer

The most important items need to go at the top of your budget list and get paid first. After the essentials – the 4 walls – you continue covering items of highest priority until all of your dollars are allocated.

* Successful budgeting is all about this one thing
* Three steps to keeping your budget on track
Personal budget percentages: Here’s where our money goes

In closing

What do you think about these four walls? Do you make it a priority to cover these items first in your family budget? If you want to share, what are some of the next top items beyond your own budgeted “4 walls”?


Do you have a personal financial plan?

Financial planning checklist 2018 small

Here's a free personal financial planning checklist - to make sure you have the most important financial items covered.

Get it now and start checking points off the list.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit


  1. Mrs. Picky Pincher August 1, 2017 at 1:39 pm - Reply

    You know, I think I would turn the “Clothing” wall into a “Cost of Living” wall. For example, I don’t really buy clothes, but I do buy everyday items that are kinda hard to categorize. But yes, most people need to be budgeting and include major expenses on it! We also include our savings rate, takeout totals, and cost per meal.

    • Brad Kingsley August 1, 2017 at 2:50 pm - Reply

      Thanks for commenting Mrs P.

      There can be a big difference – for some people at least – between cost-of-living items and clothing. I think this basic list originates from generally accepted “basic needs” (see wiki reference) of clothing, food/water, and shelter. Those should be covered first, then other cost-of-living items.

  2. Matt @ Optimize Your Life August 1, 2017 at 8:30 pm - Reply

    I always recommend people look at housing, transportation, and food before anything else. That’s where the big money goes. If you really want to save, you need to make sure to bring your budget to where the money is.

    • Brad Kingsley August 1, 2017 at 8:33 pm - Reply

      “If you really want to save, you need to make sure to bring your budget to where the money is.”

      Indeed! Thanks for stopping by and sharing Matt.

  3. Josh August 2, 2017 at 7:36 pm - Reply

    After our mortgage, insurance is our next largest expense followed by food. Much of the insurance is non-negotiable like homeowner’s, auto, and health. While we have taken steps to switch providers and raising our deductibles to get the lowest monthly premium, there is only so much you can do. Other than living in a small house and driving a cheaper car.

    Until we started writing out our monthly expenses, insurance was a “hidden” expense as we just rolled it into the cost of home ownership or car ownership.

    • Brad Kingsley August 3, 2017 at 10:07 am - Reply

      Thanks for stopping by Josh. Yeah, insurance can be costly! Downsizing house is certainly an option to consider – we did it three years ago. For auto people can consider lowering coverage once the car is paid off and the emergency fund is fully-funded. We largely self-insure on our cars now and it’s less than half the cost of full coverage.

  4. Yadira August 3, 2017 at 2:51 pm - Reply

    Very neat! These is absolute truth even if you consider yourself to be doing well financially you should still take care of your four walls first & scan your expenses to see what can you reduce. We did this at home and we save a huge deal on insurance. We still run a scan periodically just to keep things on check.

    • Brad Kingsley August 4, 2017 at 11:39 am - Reply

      Indeed Yarida! Thanks for stopping by and commenting.

  5. Whymances January 31, 2018 at 10:58 pm - Reply

    I like the concept of ‘4 walls of budgeting’. It makes it a good point when making up a budget or deciding what to cut if you’re short. Putting those that have just enough income or not enough aside, I feel the main issue people run into is telling the difference between what is truly a want vs need… Or not wanting to look at cheaper options for the same need. I’ve certainly been guilty of this.

Leave A Comment