as a do long arm quilting for others, I have to separate my expenses--if it's business related, I keep all receipts and documentation for tax purposes. I also have one credit card dedicated to just my quilting business which helps keep those receipts sorted.
For my personal quilting, I don't really do a strict budget--but since I use a credit card for about everything, and pay it in total at end of month, I have a reality check on what I'm spending on a monthly basis.
Since I sew personal quilts upstairs and have my long arm in the basement--where a notion, backing, etc ends up determines whether it is a business expense for me.