Creating Your Budget

In order to change your current financial reality, you first have to figure out where you are. When most people hear the word, “budget” I think the first thing that comes to mind are icky, no fun, boring spreadsheets and calculations. Please let me be the first to tell you that it doesn’t need to be any of that. You can make your budget include any and everything that you want. The only real requirement is that it should include all your income and all of your expenses. How it looks, feels, and what it includes is all up to you. You can still go out to eat and keep the gym if you want, you’ve just gotta make it fit.

First, you’ll need to add up all of your income during a given month. This includes your salary, your side hustle, money from grandma, all of it. Once you know exactly what you’re bringing in, you know exactly what you’ve got to spend. It’s important to note here that no matter what you spend your money on, you cannot consistently spend more than you are bringing in. If you look at this number and know its no where near how much you spend, you’ve got 2 choices: spend less or bring more money home. If your numbers don’t add up, you know what you’ve gotta do.

Next, we’ll look at your expenses. These can be broken down into 2 groups: variable expenses and fixed expenses. Your variable expenses are things like your gym membership, shopping allowances, date night, etc. These are the things you don’t necessarily “need” but that you value and love in your life. They’re not crucial to survival, but these are the things that make us feel alive.

Then we’ll look at your fixed expenses and debt payments. These are items like mortgage or rent payments, student loans, utilities, etc. These are the mandatory expenses you’ll need to cover to survive or break even before your variable expenses.

At the bottom of the page, add all expenses (variable and fixed) and multiply by 3 to get the minimum amount you should have in your savings account. That means, in case of an emergency, you should have enough to cover all expenses for 3 full months.

Confused yet? See the template below to get started.

Once you have written down and know exactly what you’re bringing in and paying out, you can develop a plan to get to your goals. 

Want to buy a home? Adjust your budget to save more.

Trying to eliminate your credit card debt? Cut back on your variable expenses and allocate more money towards your payments.

You can do this!

Having a budget is HUGE for getting out of struggle and reaching new financial heights.