Breaking Down The Word “Budget” & Creating One That Actually Works For You

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Breaking Down The Word Budget and Creating One That Actually Works For You!
Scroll down below to download your free printable Monthly Budget Worksheet!
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   It’s January and you know what that means? It’s time to revisit our finances!

Year after year, one of the most popular New Year’s resolutions we have seen to always be around improving our finances.

What better way to do that than with a budget that actually works for you.

Scroll down below to print out a Free Monthly Budget Worksheet to help you keep track of your money.


What is a budget?


    A budget, as defined by consumer.gov, “is plan to decide how much money to spend each month.”

Although it may be but a small but simple word when written.

But when read aloud, it can raise the hairs on your back.

These negative connotations are usually the norm to most folks when they hear this “dirty” word being used.

But the reality of the matter is far from it.

The word budget is actually the real unsung hero when it comes to managing our very own personal finance as well as the financial institutions as a whole.

Without it, havoc would ensue indefinitely in all parts of your life due to the stress and strains on your lifestyle and bank account.


Here’s how to create a monthly budget that will finally work for you:

  • Start off small by wetting your toes in the water and keep a weekly spending journal.
  • Then as you become more comfortable and confident,
  • Start to dig a little bit deeper and stretch your auditor muscles a bit with a monthly budget worksheet, which we will revisit a little later here.


But first, try a morsel of this on for size, and start tracking your moolah below:


Step 1-Start by keeping track of all your purchases with a spending journal

Any small memo pad or notebook will do for that matter, of all your expenses for one week, as in 7 days to be exact.

Pick a start date and an end date. What do you notice?

Are there any purchases that you regret making during that week of spending?


Step 2-Decide if there are alternatives to your spending choices. 

Now ask yourself, was that venti latte from Starbucks really worth the $6.25 + tax?

And then it dawns on you, this is just part of your daily morning routine.

How can something so small and mundane be wreaking such havoc on your bank account?

You’d be surprised at the many little things that we do on a regular basis that contribute to our self-sabotaging spending habits.

Could you have saved the money and bought yourself a premium bag of ground coffee from your local grocery store for $3.99, instead?

That would definitely last you over a month by brewing your own cup of joe at home & adding to your own enterprise, right? 😉


Step 3- Let’s take this a couple steps further by revisiting what you have learned in step 1.

Keep this spending journal going for an entire month aka a Monthly Budget. (By the way, you can download a Free Monthly Budget Worksheet below to help you keep track of your monthly expenses, just scroll to the bottom.) 

Then examine your purchases and ask yourself again.

Now that you have a full month’s worth of your spending behavior jotted down, let’s take a wide-angle view of your numbers and ask yourself, were these expenses really worth it?

That thingy majiggy that you’ve found on sale last week was so cool, you just had to have it.

But now, it’s just sitting there in the corner collecting dust with all the other thingy majiggies that you bought on sale before it.

Why not recoup the costs and make a profit on those lackluster thingies and pocket the difference, instead?

Who knows, maybe you’ll even find a hobby you’ll enjoy that will make you money instead of costing you money? 


Step 4: Look at your month of expenses in your spending journal and repeat step 2.

Are there any alternatives that you could have tried instead?

Was the $119 purchase that you just made on that hot date night with your hubby really worth it for you to forego having groceries for the next week?

Or maybe even two weeks?

What about those drop-dead gorgeous pairs of shoes you saw beckoning you from the store window of Saks Fifth Avenue as you casually walk by from an innocent errand?

You just couldn’t resist them, can you? (Don’t worry, I won’t judge you, I’ve been in your shoes myself!) 😉


Step 5: Write down your monthly income and subtract out all of your month’s expenses.

Alright, now let’s get real and be ruthlessly honest here.

After all, you’d be lying to yourself if you did not include that sassy pair of shoes from Saks in your spending journal.

Ok? Breathe, it’s gonna be ok, promise.

Now check and see, is there any money left? If so, let’s assign a category to it.


Step 6: Keep track of all your progress with your monthly spending journal aka monthly budget. 

If not, let’s reevaluate your expenses and see which category you can deduct or reduce from so that you can have some wiggle room to breathe going forward.

If you were completely honest with yourself in step 5, great job!

This will help you going forward because you will be able to anticipate and guage yourself by allowing yourself a much needed line-item or so for some “fun money,” even if it may seem like a piddly amount at first.

It will add up if you know what to expect of yourself. 


Step 7: Review, Revise, and Repeat

Remember, a budget only works for you if you allow it to do so.

It is not meant to be a hard and fast rule every single month.

Expect changes and fluctuations to occur especially in the areas of Food, Fun, and any other Discretionary Income (anything left over after your utility bills, mortgage/rent, and loans) since these are the few areas that you have the most control over spending & spending habits.


In Summary:

These are just some of the choices that we are all faced with every day as we decide what and how we spend our hard earned money.

Whatever our income level, we can all benefit from a Monthly Budget to keep track of all of the cash flow and savings in our bank accounts.

Following the 7 steps above, will help you keep better tabs on where your money goes every month, just remember to be flexible and be kind to yourself, it takes practice.

Below, you can find a free printable Monthly Budget to help you keep track and navigate your financial journey this month, enjoy!


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