Do you know where your money is going?

This step is the 2nd most critical to becoming financially free, 2nd only to trusting God and allowing Him to be the Owner and you the Manager.

As Dave Ramsey puts it, you have to give EVERY dollar a name.  I say if you don’t tell it where to go, your money will just go and you’ll never see it again.  Have you ever noticed, you know you just got paid but still don’t have any money?  It’s because it went bye bye to never never land!  You need a budget to know where your money is going.


Hopefully, you’re currently working on or have completed getting your $1000 emergency fund together.  If not, please please PLEASE go back and read my last post on Financial Security in an Emergency.  An emergency fund has changed my family’s life because it has saved us so many headaches when emergencies popped up, and it’s only the FIRST step to getting out of debt and living a life with financial freedom. Get this step done as quickly as possible.  A budget might help you with this to find out where those dollars flying out of your wallet are actually going.

So let’s get started.  I hope you understand the reasons and agree with 99% of why you need a budget, however, most blogs tell you why you need a budget but don’t walk you through setting one up.  That’s what I’m going to help you do today.  Let’s start by getting you to download this pretty basic form for a budget.  I’ve taken multiple different budgets you’ll find on the internet and combined them to attempt to create a complete budget form.  If you want to start now, click on the link here: SD Cash Flow Budget XLS

If you’ve never done a budget ever before, it might look like a lot when you open the spreadsheet, but I want you to know how to start and finish the entire process.  That’s why I created the “Instructions” page.  It is very detailed instructions because I don’t want you to miss anything.  A teacher, many years ago, taught me when you are giving instructions, be as detailed as possible, otherwise if you’re telling someone how to blow a bubble with gum and tell them to put it in their mouth, they won’t take it out of the wrapper…

Eating-Money-Food-SavingDoing a budget for the first time will absolutely amaze you as you realize what you spend on the silly stuff, and, honestly, if you’re like the average American, your food category will shock you.

If you haven’t already, go ahead and open the budget spreadsheet up.  You can find it here: SD Cash Flow Budget XLS

As you open the spreadsheet, you’ll see a “Digital” tab or a “Printable” tab at the bottom of the file.  If you prefer to print it, please use the “Printable” tab, but if you prefer to do this digitally, click “Digital” now.

Getting Started to Finishing the Budget

1. Income

  1. Write (or type) in the month coming up next
  2. Write down your Gross Pay for the month (this is the money you make before taxes are deducted)
  3. Write in the taxes that are taken out for the month
  4. Subtract your taxes from your Gross Pay to get your Net/Take Home Pay

If you are having troubles figuring out your monthly pay or taxes, grab your pay stub, find the area where is shows your “gross pay” and “taxes.” Take that amount and multiply it by the amount of checks you get in a month.  If your income fluctuates (is different every check), try and estimate how much you would make on a bad month.  If you’re in sales and get paid on commission, calculate your worse month as a regular income, and anything extra you can add to the budget as you receive it.

2.  Expenses

  1. Before you begin with your expenses, take out a piece of paper and write down everything you can think of you spend money on and the amount.  This will help you not forget categories when you start doing this in the budget.
  2. Begin with the top category, Charity.  We strongly recommend, no matter where you are financially, to give 10% of your GROSS PAY to your local church.
  3. As you write in the amount you’re budgeting to that category, subtract that amount from your Net/Take Home Pay.
  4. After your first category amount, Tithe, has been filled in and “Remaining” is calculated, continue to run down the categories until you’re Remaining column says “$0”

Of course, I don’t expect you to nail it right at zero on your first try, you’re going to forget items, you’re going to miscalculate, you’re going to make mistakes.  THAT’S OK!  We are human, and nobody can do this perfectly on your first try.  That’s why I personally suggest doing it on your computer AFTER you list all of your expenses on a piece of paper.

I wish I could say “It’s that simple,” but this isn’t simple.  The physical act of creating a budget is very simple (although in the beginning it’s frustrating), but this isn’t just a physical act.  It’s a mental, emotional, and spiritual action that you must force yourself to do every month for the rest of your life.  This is something that can change your life, and just like any positive habit in your life, you have to commit to putting it in motion.  You have to forget about all of your family and friends who just spend money “because they have it” and force yourself to only spend the amount you have allowed on your budget.  I’m not saying you can’t have money for fun and entertainment, but make sure you know how much money that’s going to be. Are you tired of your money just disappearing?

I’d love to hear from you on ways you’ve found to help stay consistent in your budgeting, and even other ways to save money or cut down your budget to help you in this journey. Thank you for your comments!