How Flex Budgeting Works

Flex budgeting is the easiest way to budget and allocate your money so you have the freedom to spend it…however you want.

Conventional budgets don’t support the way we actually spend our money. As it turns out, we aren’t so predictable after all, so why should your budget have so many spending rules?

The Flex Budgeting worksheet helps you document expenses, plan your savings, and calculate a flexible spending allowance for you and your family.

Flex Budgeting helps you organize your money into three categories. Each time you get paid, a portion of your paycheck is automatically deposited into an Expenses account, a Savings account, and the remainder goes into a third account for Flexible spending called “Flex”.

Let’s see how it works.


To begin, find your most recent pay stub and fill in the blue cells to record your income. Do the same for your spouse, or simply put zeros if you just want to budget for yourself. Don’t forget to specify your Pay Frequency…this is important information for determining how much you’ll need to save each paycheck for things like bills and expenses.

When you’ve entered the values correctly, the amount listed for Net Paycheck should closely match what you get paid during each pay period.

Let’s go to Expenses, the first category in our Flex Budget.


If you’re budgeting with a significant other, it’s not uncommon to use one person’s paycheck for all expenses, and use the other person’s paycheck for separate goals like savings. However you decide to split things up, the worksheet will calculate how much each person needs to deposit into the Expenses account.

As you log your Expenses, only include those which occur on some regular schedule. These are usually bills like rent or mortgage, utilities, insurance, or streaming services, but it’s a good idea to budget for recurring expenses that are a little more infrequent, but still regular, like Car Registration, Oil Changes, and Holiday Gifts. Don’t forget to use the drop down in the Frequency column to reflect how often these expenses occur.

When you’re finished documenting all of your bills, you’ll see how much you have to save from each paycheck to cover all of your Expenses. If it seems low, remember, you might get paid a couple times per month, and this amount represents how much you need to put aside from each individual paycheck. Don’t worry, the math works out!

Let’s move on to Savings, the second category in our Flex Budget.


The Savings bucket is a bit of a playground, because the amount of money you save from each paycheck is really up to you. Notice the number titled “Balance for Flexible Spending”. This number represents the amount of money leftover from your paycheck after setting aside money for expenses and savings. As you adjust your savings percentages, notice how this Flex spending amount goes up or down.

The trick to Flex Budgeting is determining how much flexible spending money you’d like to have each paycheck. This Flex money is for things like groceries, restaurants, shopping, and pretty much anything that isn’t a recurring expense. Unlike most budgets where you specify spending allowances for things like groceries, Flex Budgeting allows you to spend your money however you want to spend it.

If you get paid every two weeks or so, a good place to start is $300 to $500 in Flex spending money per person for a comfortable lifestyle of occasional nights out, light shopping, and normal levels of recreation and leisure. This of course varies depending on where you live.

Once you decide on a Flex amount that you want…say, $500…adjust your savings percentages until your flex value is close to that number…that looks pretty good. Now you can see how much you’re saving each paycheck, each month, and over the course of a year.

Bank Accounts

Now that we’ve calculated our Expenses, Savings, and Flex buckets, we can see exactly how much money from each paycheck we need to deposit into those accounts. It’s best to work with your employer to set up automatic deposits, but you can do this manually, too. The priority column represents the order in which money is deposited…your Expenses account should always be first, followed by Savings, and finally, Flex.


And that’s it! Your Flex Budget is ready to use. To see a summary of how you’re spending each paycheck, click on the Summary tab.

Ready to go?

Click below to download the Flex Budgeting Worksheet and take control of your budget.