Woman creating a monthly budgett

Budgets are the worst, right? You probably didn’t even want to click on this link because you’ve likely tried budgeting many times before, right? And if you’re anything like our family, you’ve probably failed many times before, too, right? It’s time to turn that around and finally create a simple monthly budget that will work for you.

Why You Need a Monthly Budget

I get it. The “B word” is kind of scary because, to most, it has a negative connotation. We assume a budget to be restrictive. We assume it will keep us from doing (and buying) what we want in life.

This is SO not the case. It’s just a plan. A plan for your money before it comes in. That’s it.

Repeat after me, “A budget is just a plan for your money, so you don’t spend carelessly; it’s honestly that simple. 

You work hard, and it really sucks when there is too much month at the end of the money, and we have nothing to show for it except a huge Target Red Card bill and a pile of Amazon Prime boxes in the garbage can.

If this feels all too familiar to you, it’s time to give budgeting another shot. It often takes many times to get it right, but once you do, it’s life-changing.

Budgets do not need to be scary and overwhelming. Instead, they are really quite simple; it is we who tend to over-complicate them.

If you haven’t already downloaded and completed my free Financial Inventory worksheet, you can do so here.

Create Your Budget

Once you’ve completed your financial inventory worksheet, it’s time to begin budgeting. You can create your budget on a spreadsheet, an app, or with plain old pen and paper.  

The first step is to list your income. List any income that you have coming in for your household within the month.

Next, list all your monthly debt payments from your Financial Inventory worksheet.

Then list all your other expenses. You want to make sure you include every single thing you need to purchase, pay, or rent in the month. You want this to be all-inclusive to eliminate surprises.

Necessities: Mortgage or rent, electric, gas, water, food, transportation, insurance, etc.

Debts: You already have these from your worksheet; list the minimum payments here.

Extra Expenses: Now you can list all the extras, anything else that you have to (or would like to purchase)

Total all your expenses except for the extras and subtract that from your total monthly income.

Anything left will go towards your “extra expenses” or any sinking funds you create.

A sinking fund is putting money aside each month to save towards a specific goal.

For example, transfer a certain amount each month to your savings account, so you can pay your car insurance when it comes due. 

You can keep sinking funds for your quarterly bills and save for Christmas as well!

Any extra money you can find in this budget will first go towards saving $1,000 for a starter emergency fund, and once you have that completed, it will go towards paying off all your debt (except for your mortgage) as quickly as possible.

That’s a monthly budget in a nutshell.  

This explanation may seem oversimplified, but this is intentional to avoid over-complicating the budgeting process.  

The simpler a task is, the more likely you are to stick to it.

What is a Zero-Based Budget

We use what’s called a zero-based budget. That means you assign jobs for every single dollar you bring in each month, and the bottom line of your budget will equal zero.  

Use this equation:


We take our income and pay all our expenses, including what we budget for food, our sinking funds, our tithe/giving, and anything else we are anticipating for the month.  

Any money left should be put toward your financial goals. Whether you need to build an emergency fund, save money, or pay off debt. After that, you should be left with zero.

But the best part is that when you create a budget, you are the boss.

Let that sink in for a minute. You are in control of your own money and not the other way around.  

You can put whatever you want in your budget. Want to go on a trip? Add it to your budget. Need some new clothes? Add it to your budget! See how this works?

If you are in debt, the priority should always be saving a starter emergency fund first, then getting out of debt, then finishing your full emergency fund so that you won’t need to go back into debt if you experience an “emergency.”

Once you are back in control, you can put that budget to work for you and start making your dreams come true.

When we first began working to improve our finances, we set aggressive goals for getting ourselves out of debt.

Honestly, we weren’t sure if it was actually possible to achieve them, but since creating and sticking to a monthly budget, we have hit every single goal on that sheet…and early.  

Creating a plan for your money and learning to love life on a budget is how you, too, will reach every one of your financial goals as well.

Does a percentage-based budget sound more appealing to you? If so, budgeting with the 30-30-30-10 budget rule may be a better fit.

This article was produced and syndicated by Cents + Purpose.

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