Budgeting 101: Personal Financing

Why is Budgeting a four letter word? Okay, I know it’s not really a four letter word, but it may as well be. It feels scary, restrictive, hard.


Here is the thing about budgeting, it doesn’t have to be.





A budget is nothing more than a plan. It’s simple math that you are 100% in control of.

Your budget is the foundation for your life. When you can master your budget, you open yourself up to so many possibilities. You will be able to start working on your dreams and goals.


When I started budgeting, my income was 90% commissions. I had months when I rocked it, and others that were dismal. Since then, my income has become consistent, but I still budget as if it was cyclical. This method has saved me more than once: emergency vet bills? No Problem. Unexpectedly out of work for 3 months? Sucks but we’re good. Last minute Justin Timberlake concert in Vegas with my sister? Heck Ya!


Before we get started, I want you to breathe and tell yourself that you’re smart and that you got this! Remind yourself that budgeting is a lifestyle change and a means to freedom.


Here is what you need to do your budget:

  1. Calculator

  2. Piece of paper

  3. Your bank and credit card statements

  4. Last months paychecks

  5. ½ a glass of wine. (Not a full one because that’s when math mistakes happen, but ½ a glass is just enough to treat yourself for this task!)


Budgeting 101


Step 1: Calculate how much money comes in each month.

On the top of the paper write how much money you expect to make in an average month.

  • Changing salary: If you are commission based or have inconsistent paychecks this section is for you: o How much did you make on your lowest month in the last 12 months? o How much did you make on your highest month in the last 12 months? o Whats the average amount that you make each month (add up the last 12 months and then divide by 12)?

  • Set salary: Lucky you! Just use what you brought in last month.

  • Miscellaneous: Remember to include any alimony / child support or income coming in from side hustles.


Step 2: How much money do you spend each month?

It’s time to get real. This is not a time to guilt or shame (especially if you are doing this with a partner). It’s an eye-opening exercise and know that in steps three we will create a plan!

  • Create categories: In a column, list out all of your expenses with the month total amount listed next to it. And I mean EVERYTHING! Rent, childcare, groceries, gym, eating out, utilities, credit cards, car payment, school loans and monthly savings.

  • Look at your current expenses: o grab your credit card statements and bank statements o Go down your statements and put each item into a category *Some bank and credit card companies will automatically categorize your spending for you, check your online portal.


Step 3: It’s math time baby!

  • Grab: Your calculator & a piece of paper.

  • Get Started: Put you monthly income in and start subtracting your expenses.

  • What is your final total: o Do you still have money left over? If so, then congratulations! You have finished your monthly budget and you can put that money towards paying off debt or put it towards savings. o Are you at zero? If you are comfortable with this, then you are all done! However, if you have a goal that needs to be financed (buy a house, go on vacation, start a business) you may want to keep reading. o End up with a negative number? Take a minute to appreciate the fact that you were smart enough and persistent enough to get this far. This is where the fun starts. You have now entered into what I like to call “Are you smarter than your Money?” The answer is 100% yes you are! Get creative. What is a want and what is a need. What can you do to save money or eliminate an expense all together. Keep working your budget until your numbers work. You got this!

  • Tip - It’s okay to do your budget multiple times. Heck, I’m re-doing my budget right now and I have about 10 different versions. I’m looking for what I feel comfortable with. Sometimes I can brainstorm ideas to make extra money on the side, or how to cut a bill without effecting my lifestyle too much ( see how to save money on groceries, and save $2,000 a year)



I want to be brutally honest. I read these budgeting blogs, and people make it look easy and fun. It can be. I like the problem solving aspect, taking control of my future and the that I don’t have to really be stressed about money. On the flip side, there are times when the green envy monster appears when I see my friends with designer bags and clothes (this is not a priority for me so it does not take up a big portion of my budget) or going out to expensive restaurants. I wonder how are they able to do it. These feelings are normal. But you have to remember that budgeting does get easier as you start to figure out what’s truly important to you. These same friends that the jealousy monster was green with envy with have also expressed that they were also jealous of the vacations that my family goes on (a big priority of mine) or the neighborhood and house we live in (that one we just got lucky). All I am saying is that you need to do you and try your best to be patient and understanding with your feelings. Keep your eye on the prize ladies and it will pay off!




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