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I know, trust me…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

A budget is more than just a series of numbers on a page; it is an embodiment of our values.


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, that’s all.  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.  This book is a great tool if you need some extra help with setting up your budget!

We 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!  Or was that just me?

If this feels all too familiar to you, I really want to encourage you to give budgeting another shot! We tried it many times before we finally got it right but once we did, everything changed!

Budgets do not need to be scary and overwhelming. Instead, they are really quite simple; it is us who tends to over-complicate them.  I want to show you how simple they can be.  

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 worksheet we can get started.  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. We really want this to be all-inclusive to eliminate surprises.

Hands holding money with text that reads: How to budget when you live paycheck to paycheck

Note: If your income fluctuates each month, it’s ok, you can still create a monthly budget with an irregular income.

I want you to take your expenses and group them accordingly:

NECESSITIES – mortgage/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)

Add up 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, I transfer a certain amount each month to our savings account so I can pay our car insurance when it comes due. 

We do this for our quarterly bills also, and once we are completely debt-free will do this to 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.  

I know this explanation may seem oversimplified but this is intentional because I really want to keep you from over-complicating this process.  

The more simple 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 that we assign jobs for every single dollar we bring in each month and the bottom line of our budget will equal zero.  

We 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 is then paid on our remaining debt.  We should be out of debt at the end of August; at that time any money left will go towards funding an emergency fund of 3-6 months of living expenses.

After that, we will be left with zero.  We don’t keep much extra lying around, then we’re not tempted to spend it.  

I haven’t mentioned the best part yet….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 there is 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 the Baby Steps we set some super 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.  

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.

I want the same for you and I know that 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.

Want to go deeper into the wonderful world of taking back control of your finances and achieving “money things” you never thought possible?! My signature money course will help you get there, get started now 💸

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Kristin Stones is the owner of Cents + Purpose, an online community dedicated to sharing practical personal finance content. Her mission is to equip women with the necessary tools and knowledge to take back control of their money and live a more purposeful life. She creates actionable content to help her audience achieve financial wellness using her simple approach to managing money - all learned through her personal experience of paying off almost $55,000 of debt in under two years.

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