Now we’re cooking!  Everything that you’ve done so far  has prepared you for today’s post.  Creating a budget that works! Creating a budget is like pulling together all the right ingredients for the perfect recipe.  In this case, we’re cooking up financial freedom!

Let’s recap:

By now you should have created your financial goals, picked a spreadsheet from Day 3, reviewed all of your income and expenses as well as your transaction histories.  So you should have a pretty good idea of how much you bring home and spend in a month.


  • Budgeting spreadsheet
  • Income
  • Expenses

Pull out out spreadsheet and add every expense as well as your income to the appropriate columns.  Based on the review of your income and expenses, you should be able to come up with realistic amounts for your new budget within your spending categories.  Don’t try to go cold turkey in one area as that never lasts very long.  Instead, break down the spending in a trouble area into doable chunks.  Why?  It’ simple, spend less than you earn and you have to practice in this area in order to master it.

For example, if you normally spend $250 eating during the week at work for the month then cut back to $150 and bring lunch the rest of the time.  In the subsequent weeks, bring the amounts down until you get to your desired goal.

Your spreadsheet should automatically calculate your balances and/or amounts left over because every dollar has a job.  By this we mean you should have no money left over that doesn’t have a purpose.  This is what we call Zero Based Budgeting.  Every penny is accounted for, even if it means you add it to the “blow money” fund.

The next 30 days will be your trial period.  However, feel free to adjust this on a weekly basis as everyone is different.  Don’t wait a whole month to change something if you know that it won’t work for you.  Still, give yourself some time to adjust to your new spending habits.

Don’t Forget!

  • Give yourself room for trial and error, you’re not expected to get it right the first time but learn from the mistakes
  • Be realistic within each spending category and more importantly, honest with yourself about your spending habits
  • Try to look at and review your spreadsheet daily during the first 30 days.  This reminds you of what you’re working towards and how you need to stay within your defined spending limits.

 How are you doing so far?  What areas are the hardest for you to budget consistently?

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