What Is a Line-by-Line Budget? Our Family’s €5,000/Month Plan

What is a line-by-line budget, and why you should create one. See how our family’s €5,000/month plan helped us take control, and how you can too. We share our real numbers in a full breakdown, line-by-line, across 27 budget categories.

If you feel like money slips through your fingers every month, you’re not alone — that was us, too, a long time ago. I had tracked expenses and written budgets for years, just to realize we weren’t crushing it. That was frustrating. It took us a long time to discover the power of the line-by-line budget. That budgeting method gave us total clarity — and suddenly, budgeting just felt easy.

In this post, I’ll show you exactly what a line-by-line budget is, how it helped us take control of our €5.000/month income, and how you can create your own — maybe even your very first.

What Is A Line-By-Line Budget?

A line-by-line budget is an extremely detailed budgeting method. Rather than grouping expenses into broad categories, you break each one down — housing, food, subscriptions, kids’ clothing — into specific, trackable entries like “Cosmetics”, “Toiletries”, or “Electricity”. This way, every single expense is tracked, line by line, in a way that makes sense for your family’s unique situation.

Living on a line-by-line budget isn’t about restricting or limiting yourself. It’s about gaining clarity about how much money you (can) spend, and once the money’s gone, it’s gone. It’s about freedom. And it’s absolutely possible to live on such a predetermined family budget. We are the best proof of this.

Why We Switched To A Line-by-Line Budget

Our journey started with a shockingly high grocery bill many years ago. I’m a bit embarrassed to admit it, but we were spending over €1.200/month — and it was just the two of us back then. Our money felt like it was vanishing. We thought we were being mindful, but without specifics, it was easy to overspend. Broad categories just weren’t cutting it.

Once I switched to a line-by-line budget for the budgeting category “Groceries”, everything changed. We finally saw the “why” behind our numbers. We realized how much we spent on things like quick supermarket runs, or takeout “just because”.

Thanks to that change, I quickly managed to cut our grocery bill in half. Years later, after consistently using this method, we were spending just €200–€300 per month — and by then, we had become a family. I share more about our grocery savings and current strategy in the blog post 10 Shocking Ways a Line-by-Line Budget Saved Our Family.

Fascinatingly enough, it still took me years to expand this budgeting strategy across all of our broad categories. I think it was because I felt a bit overwhelmed by the idea of breaking down every expense in such detail.

But you know what? After just a couple of months, I had created a complete line-by-line budget. And like with everything in life, once I settled into the routine, it became second nature — and now takes just a few minutes every week, or every other week, to log our expenses.

Today, we plan and track our monthly income of €5.000 across 27 detailed budget categories. We split the responsibilities between the two of us, which makes it super easy to stay on top of everything.

The Results: Less Stress, More Freedom

By knowing where every Euro goes, we stopped wasting money and started using it intentionally. This budget allowed us to live on one income and gave me the freedom to be a stay-at-home mom for two years. Also, without it, I don’t think we could have invested thousands each and every month to bring our family’s dream of early semi-retirement and Semi-FI to life. And the emotional shift? Just as powerful as the financial one: less guilt, more clarity, and true peace of mind.

How To Create Your Own Line-By-Line Budget (Free Resources)

To create your own monthly line-by-line budget, start with ? steps:

1. List all sources of income — especially the irregular ones like tax refunds or cash gifts, since they count as income too.
2. List each expense individually, no matter how small, with line-by-line detail (e.g. not just “Groceries”, but “Toiletries”, “Pantry staples” etc.).
3. Group expenses into meaningful categories that reflect your family’s unique situation.
4. Categorize expenses as fixed or variable – see our example below.
5. Include your personal savings goals – both medium-term (e.g. for upcoming events or purchases) and long-term – as well as an emergency fund, if needed.
6. Add sinking funds for annual or irregular expenses (e.g. gifts, vacations, car repairs) – see our example below.
7. Bonus: Compare planned vs. actual spending weekly or bi-weekly to set realistic savings goals and adjust your budget when needed.

Here are some resources for creating your own line-by-line budget:

• 11 Favorite Free Google Sheets Budget Templates of 2025
• Need a Google Sheets Budget Template? Here Are 12 of the Best
• 101 Costs You Need to Budget for if You’re Always Forgetting Expenses
• Our FREE Simple Bare Bones Budget Calculator (which we use for our family budget)

We offer this easy-to-use FREE family budget template, which you can get by clicking on the picture or link above. As it is a “Simple Bare Bones Budget Calculator“, it’s especially designed to help you live a family life you love on a budget you can afford, so you can achieve the financial goals that are important to you.

Behind The Real Numbers Of Our Line-By-Line Budget

A brief note on the actual figures in our line-by-line budget (see below). On the income side, we only consider Marc’s net salary, his employee bonuses, the tax return he prepares for us, and state benefits for our (soon) three kids (which almost every family gets in Germany, where we live). This is enough to cover our family’s entire living expenses.

My income is used exclusively to achieve our ambitious financial goals. I’ll explain more about this in the blog post Our Actual 5K Monthly Budget Breakdown For Our Family Of 5 (which gives a less detailed overview of our budget, since I don’t list any subcategories).

On the expenditure side, I will distinguish between fixed and variable expenses. We also work a lot with sinking funds, where we can set the amount as we wish, but which then act like fixed savings installments. Therefore, I count them as fixed costs, since we cannot freely dispose of this money. If you want to learn more about sinking funds, you can read How To Start A Family Budget That Really Works In 7 Easy Steps.

Complete Budget Breakdown Line-By-Line Of €5.000 Monthly

Final Thoughts: Is It Worth the Effort?

Absolutely. Creating a line-by-line budget may take a bit more time than a basic monthly overview, but the clarity and control it brings are invaluable. Whether you’re aiming to cut costs, live on one income (as we do), or simply feel more confident with your money, a line-by-line budget can be a game changer.

Budgeting isn’t always easy—but this line-by-line budget gave us back something priceless: peace of mind, control, and the freedom to decide which expenses truly matters. Your budget doesn’t have to be perfect—it just has to be yours. And using this method might be the shift you’ve been looking for.

Within the next blog posts, we’ll dive deeper into “Why and How This Budget Saved our Family”. By doing so, I hope to continue helping you on your own financial journey. To make sure you don’t miss any future resources, tips, or personal insights, join the community via the green footer below.

Have any further questions regarding a specific budget category or on how to create your own line-by-line budget? Drop a comment below, I’d love to hear from you.

Title image source: Photo from Rahul Himkar on Unsplash