Month: January 2016

Budget Bootcamp Day 20: The 10 Commandments of Managing Your Money

budget bootcamp day 20 the 10 commandments of managing your money
Manage Your Money

Just like there are commandments to budgeting, there are commandments to managing your money. I wanted to throw these in here for you so you can print them out and keep them where you can see them. Only you have the power to change your financial health, and money gives you the ability to do things we like and have the things that we desire. Maybe you don’t want to be rich, but I’m quite sure that you don’t want to be poor either, so when you get ready to spend frivolously, just think about these 10 commandments to managing your money.

1.Thou shalt keep it simple

Just like with budgeting, keep your finances simple. How many credit cards do you have? What about checking and savings accounts, how many do you have? If you are making your spending decisions based on what you have in your accounts, it may take some time for you to change the way you do that. If you have more than one of the aforementioned account’s consolidate them and let your budget be your spending guide and not individual accounts.

2.Thou shalt pay thyself first

I tell clients this all the time. Well what I really tell them is to pay themselves second, after tithes and offerings. Now paying yourself doesn’t mean go to the mall and ball till you fall. It simply means putting a pre-determined amount of money aside for savings or investing, before anything else. By doing this, you are setting yourself up for financial success.

3.Thou shalt assign every dollar a job

This is why I love the zero-based budget. It gives every dollar you earn an assignment. Many of us purchase things without giving thought to them. They purchase them based of off wants not off of needs.They don’t base them off of the availability of money in their checking or savings accounts either. This leads to increasing debt and reduced savings. By assigning every dollar you make from your paycheck towards a category in your budget, you will know where every cent has been allocated and you can make the adjustments as needed.

4.Thou shalt save save save

If you are saving, what are you saving for? Whether it is a fabulous vacation or expenses that don’t occur regularly such as your car registration, you need to save for these events. If you have them included in your budget and set some money aside each month, you won’t have to pull a big chunk of money out of your paycheck, throwing everything else off budget.

5.Thou shalt not spend frivolously

In order to make educated spending decisions, refer to your budget to see where you have dollars to spare. Here is an example: if you budget $300 a month for groceries and you only spend $200 yet fall short on another area, you can take that $100 and put it in an area that you fell short. You will have to work to train your brain to always consult your budget before spending. This exercise will also help you to minimize and hopefully eliminate any overspending.

6.Thou shalt automate thy bills

Technology today allows you to pay bills online. Even better than that, technology allows you to have reoccurring payments taken directly from your bank account. Your bank may even offer bill pay services so you can easily see all of your scheduled bills in a central location. My grandmother used to say, “Out of sight; out of mind.” Now I know that can be translated to a myriad of situations, but I like to use it concerning my finances. If the money is not there I can’t spend it. Automation has helped me to have more control over my finances and it may help you too.

7.Thou shalt pay off debt

Now that you have a budget in place, I hope that you included payment of any outstanding debts. Not just payment off but pay those debts off. Get rid of them. Stop giving away your hard earned money in interest. Paying off debt increases the amount of money you have coming in. You can take that money and start investing and getting ready for retirement

8.Thou shalt have an emergency fund

Emergencies happen, there is no way around them, they are a part of life. Your car will get a flat, it will break down, the dishwasher will go on the fritz, the heating and air unit will go out at some point. You may even have a medical emergency. You will need to have money readily available to take care of these emergencies. So start that emergency fund ASAP!

9.Thou shalt be a giver

Yes, this is close to the end of the list, but think about it. If you can’t help yourself then you can’t help others. Sure you may be able to give some here and there, but you won’t be able to give consistently. First, get your finances under control and then create a category on your budget for giving.

10.Thou shalt keep going

Don’t give up, keep going. I know that sometimes it may seem hard, but I promise it gets easier. Remember how your dad took the training wheels off of your bike? How many times did you fall before you were able to ride the bike without falling? No matter how many times you fall off the financial wagon, get back up and keep going until you get it right.


Budget Bootcamp Day 19:10 Commandments of Budgeting

budget bootcamp day 19 10 commandments of budgeting
!0 Commandments of Budgeting

By now, the thought of crafting a budget shouldn’t make you cringe. Creating a budget is fun and it is THE mist useful tool in directing your money where you want it to go. Whether you are saving for a downpayment on a house or a fabulous vacation to a tropical paradise, setting up and sticking to a budget ensures that you will enjoy your hard earned money responsibly and make the most of it. When you think of the 10 Commandments, you think of the ones given to us through the Bible. However, just like the 10 Commandments in the Bible, there are 10 commandments to effective budgeting. They are the sage rules to live by as you manage your finances.

1. Thou shalt know thy values

I can’t stress this enough. Before you setup your budget, know exactly what you want to achieve with your finances. Know what you value! There is often a disconnect between what people value and whatever resources they have available. Thinking through your values and making sure your budget and the way you spend your money reflects those, can help you  avoid regret later on. Knowing your values can keep you from impulse spending as well.

2. Thou shalt keep it simple

So many times we set out to make a budget and we over think it. We make it harder than it has to be. The ideal budget is the budget that gets the job done for you and your situation. I have said it before and I will say it again, get started by organizing your expenses in categories that make sense to you. These categories may include things like, housing, discretionary spending, entertainment, outstanding debt (if you have any) and any specific financial goals that you have. It also helps to track your spending in a certain category for 30-90 days to understand your habits and what should be set aside for them. One other way to make budgeting less intimidating is by focusing on the area or areas you have the most trouble with. I knew I had a shopping obsession, whether it was shoes, clothes, or accessories I had a problem. I had to focus and find way’s to deal with and rectify that issue, and that is what you will have to do as well. Just remember, if it is too complicated you will be less likely to stick with it.

3. Thou shalt be realistic

Keep your budget rooted and grounded in reality. Don’t budget based on the raise you think you will receive or the income tax refund you might receive. Budget based on what you know you have based on what you earn. When looking at your monthly bills, always go to the source, the statement itself. Never guesstimate, know the cold hard facts of how much that bill is.

4. Thou shalt have an emergency fund

It is imperative that you save for an emergency. After all, you never know what may happen; and you would rather be safe than sorry. One month it may be that your car breaks down, or your dish washer is on the fritz. Since you know things will happen, and you are setting money aside each month, you will be in a better position to take care of those things without going over budget. You should aim to save at least 3-6 months of money in an emergency fund. It is always good to save more than that if you can, so once you make it to six month worth of emergency funds, shoot for an entire year.

5. Thou shalt prepare for retirement

Saving for retirement should be on your budget at all times, no matter if you are a baby boomer facing major expenses, such as, healthcare bills and life insurance; or a young millennium with your life ahead of you. Please remember that saving for your retirement can be fun stuff too. Setting money aside now can help with your retirement goals, like buying that condo in sunny Florida. My retirement goal is to travel the world with my husband. What is your retirement goal?

6.Thou shalt save for budget-blasters

Splurging on holiday gifts or that new set of tires and rims will cause a major setback, if you don’t plan for it. Every year you can count on birthday’s, Christmas, and if you are married, an anniversary, so you can plan ahead and add them to your budget. Spare the shock to your wallet and budget by planning ahead for these expenses. Set aside money each month and don’t forget to start your Christmas club account, if your local bank offers the same.

7. Thou shalt allow for flexibility

What you buy and value is sure to change over time. As the years pass, make sure to review and amend your budget to reflect those changes.

8. Thous shalt include your significant other

If you are co-mingling funds, make sure to do the budget together. Although I oversee the finances in my household, my husband completes the budget with me. This way he knows where our money is going, it ensures that we share the same financial goals, and it keeps down bickering over the finances.

9. Thou shalt do what works for you

Finding out what is right for you goes hand in hand with finding and knowing your values. No two budgets are created equal, nor should they be. We all want our money to do different things. For some people, charitable contributions are important, but for some it is not important at all. You need to find what is right and effective for you and stick with it.

So there you have it, the 10 Commandments of Budgeting! Print them if you like, and hang them where you can see them.


Budget Bootcamp Day 17:Let’s Craft YOUR Budget

budget bootcamp day 17 craft your budget
Craft Your Budget

I know you may be a bit nervous about crafting your budget, but YOU GOT THIS! A budget may feel like a diet, meaning you have to cut back or feel deprived. This is not the case, creating and maintaining a budget is only painful if YOU make it that way. It’s all in how you look at it. If you being to look at budgeting as a way to concisely create your financial freedom, as well as a better environment for yourself using your resources, it becomes much easier. Aside from maintaining a positive mindset, here are 8 guidelines to aid you in successfully creating and maintaining your budget.

Make it Simple

While a budget is the greatest tool for managing finances, it can quickly become overwhelming if it’s overly detailed or idealistic. There are things that you will likely sacrifice when budgeting, but it’s very important to be realistic and understand your own habits. If you have a problem area within your budget, like eating out or shopping, instead of trying to focus on everything and being too hard on yourself,  pick that one area. The hardest part of a budget is sticking to it, so the easier you can make it, the better.

Set a Timeframe

My husband and I create a monthly budget and a yearly budget. Establish your budget for a time period that’s long enough for you to see results. I suggest you do the same. Budgeting month-to-month can accommodate everyday living expenses and bills, but a yearly budget can help you also plan for larger and more infrequent expenses, like income taxes or holiday presents. You don’t want things to slip away. Lovell says. It’s better to be approximately right than precisely wrong. With the yearly budget we are able to estimate based off of the prior year and adjust our monthly budget to reflect any yearly changes.

Build an emergency fund into your budget

An emergency fund should be an essential component of every budget. It can help you finance unexpected expenses like medical bills so you don’t have to pull income from other areas. For example, allocate just as much to your savings as your emergency fund. Once you have that in place, it’s a lot easier to maintain the budget if a big expense springs up.

Experiment to find the method right for you

Just as there are many ways to create a budget, there are also many ways to keep track of it. Whether it’s through an online budgeting program like Mint or Quicken or on paper, stick to whatever works best for you. I use a simple Excel spreadsheet. Make sure you approach it in a manner that you are comfortable with.

Make sure EVERYONE is on the same page

Whether your budget affects your spouse, partner or roommate, communication about the established financial plan is crucial. If you have two people who have really disjointed approaches to money, that’s really going to be a problem in the long run. You need to be aware of the other person’s attitudes about money and realize that your own aren’t universal. Everyone needs to be on the same page and after the same goals for the budget to be successful. I even suggest including your entire family. Don’t be afraid to tell your family that you are on a budget, who knows, you may be able to convince them to craft a budget too. Also, being open with those around you about your budget, may help to create a support system while you work to get your finances in order. For example, I have a few friends at work who eat out at lunch every day, they are aware that I won’t make that trip with them, because I have financial goals that I am working toward. If I hand’t been up front with them and told them I was on a strict budget, I would probably still be going out to eat every day wasting money. On occasion one of my friends holds me accountable and asks me how I am doing on my goals.

Make necessary adjustments along the way

If over time, your budget results don’t match your expectations or financial needs, you may assume the plan is wrong. However, it’s likely that you simply uncovered unknown problem areas. Things that pop up will actually let you know what the real norm is, so pay attention to what it is telling you. If you think, for instance, that you spend 12 percent of the family income on discretionary items, and you find after tracking for two months it’s more like 40 percent, then something is off there. If this happens, just go back, re-visit that area and tweak it.

Add income if necessary

Following a budget typically means making cuts in less essential areas or eliminating some costs completely. However, if reducing the amount of money going out isn’t doing enough, look for ways to increase the money coming in. Take a part-time job or sell something that is just sitting in your closet taking up space. People tend to think about just the one side of the equation when working to keep their budget on track, but there’s another side that you can influence too, whether it’s for a temporary or permanent basis. I am the queen of a side hustles. I enjoy earning extra money doing things I love and would do anyway. Earning extra income has boosted mine and my husbands finances and has become an ingrained part of our normal life.

Don’t set yourself up for failure

Making sacrifices is part of managing expenses, but if you set restrictions too high and too soon, you will be less likely to follow your budget over the long term. If you enjoy a latte every day, don’t go from zero to 100 in terms of cutting back. Do it gradually. Nobody wants to stick to a budget that cuts out everything fun in their life. If you keep failing at your budget, you are going to be discouraged and you’re not going to want to do it anymore.

Below, I have crafted a sample budget. I encourage you to download it and use it as a guideline to creating your own.


Budget Bootcamp Day 16: Review 1

budget bootcamp day 16 budget bootcamp review

Whoooo Hoooooo We are on Day 16 of the 30 Day Budget Bootcamp! We are over halfway there to learning how to master our budgets. Today is a catch up day of sorts. Let’s review what we have learned so far. For a full re-cap, you can go back and read all of the Budget Bootcamp posts.

If you don’t have time to do that then keep reading and I will give you a mini breakdown of what we have covered so far. If you have missed any of the exercises, then now is the time to go back and do them.

So far, we have clearly defined our why. You know exactly why you want to create a budget, whether it is to conquer you debt once and for all, or to save for the downpayment of your new home, you are clear on why you want to start budgeting.

We have written our family financial mission statement that aligns with our family values and we have written our financial vision, along with our S.M.A.R.T. financial goals. My blogging mentor has a saying, “A goal without a plan is just a wish.” So as we forge forward, we have our goals written and placed where we can see them daily, and next we will create our plan i.e. budget to make those goals a reality.

If you are married, or whatever your relationship status is, you have had that all important money talk with your significant other and you both should be on the same page. We have also learned that we need not only know our net worth but also how to find it.

In these past 15 day’s we have learned how to track our spending patterns and habits and why we should tack them. Whether they are good or bad habit’s, we have learned how to identify what triggers us to spend. We have also learned how to break any bad spending habit’s that keep us from our ultimate financial goals. We also learned how to identify common budgeting mistakes.

We have learned how to live below or within our means and how to have fun without breaking the bank or going over budget. We also covered how to determine our needs versus our wants.

Finally, we have learned several different budget forms and my favorite of which is the zero-based budget, which gives us the power to set where every bit of money we earn goes.

All in all, we have covered a lot of ground and set the foundation of the rest of the bootcamp, which will be creating our budget. Join me tomorrow as, we embark on the journey of creating a budget that works for you.


Budget Bootcamp Day 15:How To Include Entertainment In Your Budget

budget bootcamp day 15 how to include entertainment in your budget
Include Entertainment

With all of this talk about budgets and budgeting, I don’t want you to feel that living on a budget is restrictive.Sure a budget can be restricting, especially if you are already stretched thin financially.It is perfectly fine to include entertainment in your budget and there are several way’s you can include some of your favorite entertainment in your budget, just don’t over do it.

Let’s face it, when we start budgeting, the first place we look to cut costs is with entertainment. I know you don’t want to give up all of your fun. The good news is that you don’t have to, entertainment can be trimmed without giving up all of your fun. Today I am going to give you 5 tips to help you include a little fun and entertainment.

Review your viewing habits

For some people, entertainment begins and ends with the television. Whether or not you view your favorite shows and movies online or via cable, we all partake of this type of entertainment in some format. Many of of us watch our favorite shows on cable. If you are paying for enough channels to entertain a small army, yet only watch a few of them yourself, you are not making the most of your entertainment dollars. Cut back on your channels and I bet you won’t even realize they are gone. Also, don’t be afraid to shop other carriers in your area, or negotiate with your current carrier for a better deal. If your current carrier refuses to give you a better deal, then threaten to take your business elsewhere. I used to work for a large cable company, and whenever someone would threaten to leave, we would automatically send them to the retention department. This department can offer specials that regular representatives are not privy to. Now these rates may be good for a limited time so make sure that you write down the expiration date, so that, you can call and renegotiate again. Another alternative is the Roku streaming T.V. and media service. I have a Roku and I love it. You can also check out other streaming services, such as, Google Chromecast, Apple TV, or Netflix for your entertainment needs.

If it is FREE, it may be for me, and it may be for you too

No matter where you live, at some point in time your city offers free entertainment in the form of museums, and parks. If you are local to the Birmingham area, we have the Schaeffer City fest. This is a FREE concert held at Railroad Park. My family and I absolutely love it. We have seen Grammy Award winning band, The Roots, American Idol winners and Birmingham natives, Ruben Studdard and Taylor Hicks, hip hop artist, Common and several local bands, all for FREE! There were food trucks available as well as beverage booths. We also enjoyed a night Railroad Park. listening to the Alabama Symphony Orchestra FREE!. We brought our picnic basket and plenty to drink and had a wonderful family evening listening to music ranging from Tchaikovsky and Mendelssohn to popular movies. As you can see, you don’t have to break the bank to enjoy a little entertainment.

Season tickets save tons of money

If you are a fan of baseball, basketball, football or the opera, why not look into season tickets? You will receive the best possible rate by purchasing season tickets. We do this with Birmingham Barons Baseball.

Coupons and vouchers

I am a huge fan of Groupon! There I can find coupons and vouchers for restaurant’s and other forms of entertainment. Living Social is another amazing site for entertainment deals. One other avenue I use is the Entertainment Book, I buy this book every year from my school aged grandchildren. I have restaurant and entertainment, such as, golf, movies, bumper cars etc, for the entire year. The money I save more than makes up for the cost of the book itself. I also use apps on my phone and I sign up for email coupons from my favorite restaurants. Another great idea is to follow your favorite restaurant on social media. Sometimes they offer discounts exclusively for their fans.

Entertain at home

This is my favorite thing to do. I cook the entree and my friends bring beverages, side dishes and desserts. We play games and talk all night. When we have family night we eat, pay games with the kids and sometimes we even tell ghost stories. There are so many things you can do at home, and the best part about it, everyone can pitch in to help save on the costs.

Saving money on entertainment is really about paying attention to what you like. I never would have thought that I would enjoy the symphony, until I went to a performance for free. We all have things that we enjoy doing. Identify those things and spend your entertainment dollars doing them. This way you get the entertainment that means the most and cut out those things that don’t. The main this is to not be afraid to experiment and to cut the things that you don’t like. Make drastic changes if you have to, but make sure that you budget for those things that aren’t free.



Budget Bootcamp Day 14: Living Within Your Means

budget bootcamp day 14 living within your means
Live Within Your Means

If you have been following me for any length of time, you know that my husband and I live off of one income. Sure we both work and have great paying jobs, but because of our prior financial struggles, we decided that it would be best if we live off of one income and use the other income for investing and saving. Not only do we live off of one income, we both take any raises and bonuses we receive on our jobs and use them for saving and investing as well. When I started at the company I work for, I was making $12.88 an hour. Several promotions and almost 9 years later, I make much more than that, but I still live as if I make $12.88 an hour. My husband won’t allow me to disclose his salary, but let’s just say he brings home the bacon. We plan our purchases for any big ticket items that we desire and we save for them. We live not only within our means, but below it.

Now we don’t live like paupers, nor are we miserly, but we have experienced the “keep up with the Joneses” lifestyle and it was not pretty. We were broke, but we had every toy possible. That lifestyle brought us tons of grief and it just wasn’t for us. That time in our lives taught us a valuable lesson and that lesson was to live below our means. Fast forward, all of our children are adults so we can splurge when we want to, however, we will never forget the way we felt when we were broke, the stress that we were under and the feeling’s of helplessness and hopelessness that plagued us. It was a dark time, that we vowed to never re-visit. Case in point, we don’t splurge often and that is fine with us.

Now I am not telling you to go off the grid and live a barbaric type of life with no amenities, but what I am telling you; if you are struggling to make ends meet and living paycheck to paycheck, or as I like to say ‘pocheck to ‘pocheck, then you may want to consider living within or below your means. Often times, running out of month before you run out of money is not a sign that you don’t have enough money coming in, it is a sign that you may very well be living above your means. How do you know if you are living above your means? Well, if you have ever received a pay raise and found that you still run out of money just as quickly and easily as before you received the raise; then you probably are living above your means. There is great news, you can learn to live within or below your means and I will show you exactly how. These tip’s will have you living within your means in no time flat.


Keep an honest budget

The first step to living within your mans is to keep a completely honest budget. That is the reason for this bootcamp, to prepare you to not only live on a budget, but to make your money work for you. By now, you should have made a list of all of your fixed expenses. No rounding up or down or guesstimates, you need to know EXACTLY how much you have going out each month.

By now, you should have also made a list of your variable expenses. With this list, you are writing how much you want to spend, not how much you currently spend, we will take care of that later. Include every category you spend money in, no matter how random it may seem, include it anyway.

Know your numbers

You must know exactly how much money is coming in, so that, you will be able to cover your various expenses. Get your check stubs and record how much you bring home. Again, don’t guesstimate, take the time and retrieve your check stub. You want an exact figure and not a ballpark.

Track your expenses

If you need more info on tracking your expenses, then you can read my post on that here. This is the tough part. You want to know how much money you have going out over a 30-90 day period. You will need to keep receipts or write down cash purchases, but any debit or credit card purchases can be reviewed on the statement. At the end of each week, sort your transactions into the categories on your budget. At the end of your tracking period, you can go through and see exactly how much money you have spent. You may even be surprised to find out that you have gone over budget in some areas.

Set your budget and save on auto-pilot

Now for the fun part, editing your budget. First, figure out what you want to do with any extra money. A few suggestions would be pay down/off debt, save, or even invest. Next make sure to set your savings on auto-pilot. Have a certain amount out of your paycheck directly to your savings account, preferably one you can’t easily access, because if the money is not there to spend it may just be pretty hard to go over budget.

Now look at the money you have left, after paying for essentials, such as, food, shelter, utilities and gas. Do you see anywhere you can cut back?

Increase your income

If you are still having trouble, you may want to begin thinking of way’s to earn some extra income. You know, get a side hustle. During my dark financial period, I took in extra money by doing make-up. That is still something that I do today, make-up. My husband did body work and repairs to cars to earn extra money. He does that till this day. Like I said, we aren’t paupers or miserly, but we have developed habit’s that will last us as long as we are physically able to do the work.

Don’t think of living within or below your means as being restrictive. It is actually opening you up for more choices and financial freedom. You can think of it as a safe boundary, and when you are able to to increase your income you can increase your boundaries. Living within or below your means is not always an easy thing to do, it takes lot’s of discipline. I hope these tips have helped.



Budget Bootcamp Day 13:The Zero Based Budget

budget bootcamp day 13 the zero based budget
Zero Based Budget

Your biggest wealth-building tool is your income and the best way to harness your income is through your monthly budget. From your budget, everything else flows. If you want to invest money in stocks, bond’s or mutual funds, you make room for that amount in your monthly budget. Looking to get out of debt? List you debts in your spending plan. I’m sure you get the gist.

Often times, people don’t make a budget because they are afraid of what they will find. If you have overspent to the point that you now face a mountain of debt and little or no savings, you might be shamed into stopping right there. But doing nothing is not a solution. Don’t be paralyzed!

According to Dave Ramsey, “The point of a zero-based budget is to make the income minus the outgo equal zero. If you cover all your expenses during the month and have $500 left over, you aren’t done with the budget yet. You must tell that 500 bucks where to go. If you don’t, you lose the chance to make it work for you in the areas of getting out of debt, saving for an emergency, investing, paying off the house, or growing wealth. Tell every dollar where to go.”

What is a zero-based budget?

A zero-based budget forces you to spend every dollar you make — just not in the way you think. The basic premise of the budgeting strategy is that you must “give each dollar a job” to prevent waste and maximize your income, with the ultimate goal of reaching zero at the end of each month. However, zero-based budgeting works by using last month’s real income to pay this month’s expenses, so it is important to have a savings cushion equal to at least one month’s expenses before you get started.

Basically, zero-based budgeting forces you to allocate all of your dollars to something, whether you use the money for bills, debt repayment, or for savings. All of your dollars.Because, according to many budgeting experts, money “without a job” will likely get spent — often carelessly. Like for example if you saved some money on your car insurance through a price comparison website like Money Expert that extra income could be invested into a cash ISA.

And that’s why I believe a zero-based budget is the ideal financial plan for most hard-working families; nothing is wasted and every dollar has a purpose. When you create a comprehensive budget that accounts for everything, you theoretically shouldn’t have any cash left over to waste. This is the budget method that I use for my household. I have tried many different methods, but this is the one I settled on, because it covers every area of my financial life.

Creating a Zero-Based Budget

I know you are wondering just how to create a zero-based budget. Let me tell you how. A zero-based budget might sound like exactly what your family needs, but it can’t happen overnight. Certain steps need to take place in a certain order for a zero-based budget to work effectively and help you accomplish your goals. Here’s how I created our zero-based budget (and how you can create one too):

  • Track your spending for 1-3 months: Before you get started, you need to know where your money has been disappearing to. If you use credit or debit for all of your spending, this can easily be accomplished by digging out your old credit or debit card statements. Some bank and credit card websites even offer spending tracker tools to simplify the process. (Or look into budgeting apps such as Mint and Level.) If you pay cash for everything, you need to start tracking your spending from this point on by saving receipts or writing down all your purchases in a notebook. For more information on how to track your expenses, you can read my previous post on that topic.
  • List your common spending categories: Once your bank statement is right in front of you, figure out which categories the majority of your expenses fall into. These categories will be different for everyone, but might include things like groceries, restaurants, medical bills, entertainment, clothing, and transportation. You also need to list out all of your recurring monthly expenses such as your mortgage, insurance premiums, and utilities. Also make sure to create a category for miscellaneous expenses.
  • Assign your spending to a category: Once you’ve written out all of your categories, go through each month (from first day to last) and assign each expense to the appropriate category. Add up each column to see your total spending in each category for each month.
  • Focus on problem areas: Seeing your spending in black and white might shock you. For example, you might find that you’ve spent far more than you ever dreamed at restaurants over the past few months, or that you’re overspending on hobbies to the tune of thousands of dollars. Regardless, this might just be your defining moment. Once you see how much money you’re wasting, it may just force you to make a change.
  • Assign each category a new dollar figure: Discovering that you may have been overspending in several areas can be a painful experience, but the only thing more painful is continuing on the same path. In order to make meaningful change, assign each category a new dollar figure that is reasonable, yet restrictive. For example, if you’ve been spending $1,000 on groceries each month, start by cutting that number down to $700 for the following month.

Once you’ve created a new budget with updated categories and dollar figures, you need to compare that budget to your actual earnings. In the best-case scenario, you’re spending far less than you earn and can immediately begin allocating your surplus funds to debt repayment and/or savings. In the worst-case scenario, you’re still spending more than you earn and you need to make additional cuts for your budget to work.

Since zero-based budgeting uses last month’s income to pay this month’s bills, you’ll need to get one month ahead on your finances to make this work. Getting one month ahead can be accomplished by saving one month’s expenses in your regular savings account and using those funds for the following month’s budget.

If you already have at least one month’s expenses saved, you are already a step ahead of the rest. Simply use those funds to pay the expenses you’ve outlined during the next month’s budget, and stash this month’s income away into savings for use during the following month.

If you earn the same amount of money every month, creating a zero-sum budget should be a breeze. Let’s say you and your spouse get paid the same amount of money every other Friday, and two paydays occurred during the last calendar month. When creating your budget for the upcoming month, you will simply add up the pay you received during that month and create your next month’s budget based on that figure.

Since zero-based budgets use last month’s income to pay this month’s bills, irregular incomes are also compatible with this budgeting style. Simply add up your paychecks from last month in order to figure out how much money you have to work with this month — and make cuts as needed.

One thing you’ll notice is that months with lower earnings will squeeze your budget to its breaking point. Use these months to figure out if you have any spending categories that could be whittled down even further. Months with higher earnings, like when there are 3 pay periods, on the other hand, should make the following month easy when it comes to your budget. Since you’re giving each dollar “a job,” you can easily allocate those extra funds toward your debts or savings for speedier progress.

Tips for creating a zero-based budget

Zero-based budgeting might sound complicated, but it is actually very simple to implement once you get the general concept down. But, as with most things, certain actions do help make the process run smoother. If you’re considering a zero-sum budget of your own, these tips can help:

  • Budget for everything: Creating a zero-based budget will only work if you are willing to budget for everything – even things you wish you didn’t have to budget for to begin with. When writing out your monthly budget, make sure to include all categories where you spend money. Doing so is the only way to ensure success!
  • Overestimate variable expenses: Variable expenses can be hard to estimate at times, especially when it comes to costs that fluctuate – things like utility bills and gas usage. With these items, I tend to err on the side of caution. If you overestimate how much you will spend, you can always transfer any “leftover money” to savings at the end of the month. Likewise, you can use it to take care of overages in any other category.
  • Track your spending once per week: Your new spending plan might take some time to get used to, but it will be easier to adjust if you’re able to track your spending as the month progresses. For example, your new $600 monthly grocery allowance will be easier to swallow if you check your statements to see where you are at least once per week. Checking in frequently with each category will help you discover how much you have left to spend.
  • Prepare for setbacks and adjustments: Your new zero-based budget might go off without a hitch, or it might be a total nightmare. Either way, it’s important to know that you’ll likely need to adjust and readjust your spending for categories as the months progress. For example, you might think that a $500 food budget is entirely feasible, but find out that it is completely impractical in real life. When those things happen, make a note of it and change things up for the following month. Your zero-based budget can evolve as you go: It should work as a tool to help you track your spending, but it shouldn’t be too restrictive.

Zero-based budgeting might be just what you need to get your finances under control once and for all. Why? Because it helps you identify problem areas, create limits you can live with, and make your money work for you. Even better, you don’t have to purchase anything to get started.

All you have to do is face your spending head-on and follow these simple steps to build your own zero-based budget from scratch. It might not be easy, but you are sure to learn a lot about yourself and your own spending habits along the way.

Like it or not, a look in the mirror is sometimes necessary to make meaningful changes that last. In that sense, zero-based budgeting will show you who you really are, flaws and all.


Budget Bootcamp Day 12:Needs Versus Wants

budget bootcamp day 12 needs vs wants
Needs vs. Wants

Sometimes, some of my client’s have a hard time distinguishing their needs versus their wants. Take for example eating out every Friday. That was something my husband and I used to do. It was simply because I did not feel like cooking on Friday, after a long week at work. We both looked forward to the time we would would spend together on our date night, but the flip side to that was that eating out every Friday was expensive. The question we asked ourselves was is this something that we need to do or something that we want to do? William answered it was a want, while I answered that it was a need. I needed that break from the kitchen, WE needed to eat, I needed to spend that time with him and most of all, I needed to feel luxurious. (Don’t judge me, I have an exotic pallet lol) Sadly, our society has become great at blurring the lines between needs and wants, and that is exactly what I was doing. To be successful in your cash flow management, you need to be able to differentiate between the two. You need to be able to thoroughly scrutinize the wants and find more opportunities to cut back on your spending. Needless to say, I lost the argument, eating out every Friday was definitely as want. However, we were able to compromise, we eat out one Friday a month and the other four Friday’s I cook a fabulous meal that satisfies my pallet.

The best way to easily identify your wants is to start with your needs. Needs can be broken down into two categories: absolute necessities and near necessities. Absolute necessities are your food, clothing and shelter. Near necessities are: reliable transportation, insurance (property & casualty, medical and life), utilities, personal care expenses and childcare expenses. Now while these are needs, they are not absolutely necessary for you to survive, they are are important for us to function in society.

Wants are everything else that could be cut out if you have to. True, wants can be found in the previous categories I listed. Of course we have to eat, but we don’t need to eat out all of the time. We need shelter, but we don’t have to have the most expensive home or apartment out there. The same goes with clothing, we don’t have to have designer labels on all of our clothes to survive. So within each of the needs categories, there is always room to cut back.

As I told you, my husband and I compromised. We now eat out one Friday a month, because eating out was not necessary for us to survive. This was one way we were able to cut back on our spending. Besides, I am a really good cook and it is much cheaper for me to purchase the ingredients and make the meals myself. I still get to spend time with my husband, because I tell my family that on Friday nights no one can come over to visit. This is our time and we take it seriously, because we NEED that time together.

By no means am I suggesting that you cut out all of your fun, because that will never work as a long-term solution. What I am suggesting is to realize that there is a difference between needs and wants, and that many of your wants can be cut out if money is tight.

Your assignment for today is to make a list of your needs vs your wants, I have included a printout for you to do that.

I’d love to hear from you, what did you learn from today’s assignment? What are some things that you can eliminate to save money? Comment below.


Budget Bootcamp Day 11:Tracking Your Expenses

budget bootcamp day 11 tracking your expenses
Track Your Expenses

There is a reason that you are coming up short on funds. When I began my financial freedom journey I had to find the money leaks, because I was still coming up short even though I was following a budget. There was only one way to find out why and that was to track my expenses. That was the only way I was going to see where I was spending extra money. That is the only way you are going to see where you are spending extra money. You will never know where your money is going unless you track it. This may be a tedious task, but I promise you it works. If you want to touch the reality of your own situation, then tracking your spending is the way to do it.

You may THINK you are spending a certain amount on groceries, hobbies and transportation costs, but are you? If you track your spending then you will know EXACTLY what you spent. Keep reading for a few tip’s on how to track your spending and why you should.

  • Be committed- Before you get started, you must be fully committed to your own cause. It will be boring, but by the time you are finished you will be very enlightened. Besides, if you don’t do it, then who will? Tracking your expenses is a very enlightening experience, but it won’t work without the full cooperation of your household. Basically, don’t go on this journey halfheartedly. You have got to want this just as much as you want to breathe.
  • Keep receipts- For tracking daily cash expenses, such as, that morning cup of joe, I recommend keeping your receipts. If you don’t carry cash like me, then at the end of each day, pull your online bank statement and review any charges from that day. This needs to be done for a 30-90 period, in order to get a clear picture of where you money is going. This can be a hassle but it is necessary, so embrace it and carry on.
  • Track normal spending- In addition to tracking daily expenses, you will want to track all of your normal expenses, such as car payments, utilities, groceries and entertainment. Remember, the goal is to get a clear picture of ALL of your spending, so you must track every transaction you make during this time.
  • Tally it up-  Once you have gathered your receipts and/or bank statements in one place, let the fun begin. Tally all of them up. You can start by putting similar purchases into categories that make sense. Your categories may vary depending on your specific circumstances; but the will most likely include things, such as, groceries, gas, restaurants, entertainment, clothing, medical bills/co-pays, hobbies, and home/car maintenance.
  • Tell the truth and shame the devil, be honest with yourself-  If you track your spending for the full 30-90 days and are shocked by the results, don’t make excuses for your behavior. Remember why you started tracking your expenses in the first place and try to learn something from the experience. If you don’t, you’re just resigning yourself to the life you’ve been living up to now.

Tracking your spending may be a hard, tedious task and it may be hard, but learning where the holes are in your finances is the easy part. Remember, you can’t change what you refuse to recognize and you can’t tackle a problem that you don’t understand. Tracking your expenses may be the most painful part of the road to financial freedom, but it is also the most important. Because, when you see your spending habits staring you in the face, you can’t p;ace the blame anywhere but where it lies and that is with you, the spender. You won’t be able to complain that you need a raise as the source of your woes.

We often create our own financial prison out of either habit, laziness or because we fail to plan. When we do, it is easy to blame everyone and everything else, and we feel that escape is impossible. That is why tracking your spending is a crucial part of the personal finance puzzle; it forces you to come face to face with the biggest threat to your financial future.

Have you ever tried to track your expenses? Comment below and let me know


Budget Bootcamp Day 10:Creating A Budget That Works

budget bootcamp day 10 creating a budget that works
Creating a Budget That Works

As a finance coach, the main question I hear from my client’s is, “How do I create a budget that really works for me?” While there is really no definitive answer, there are a few things you can do to create a budget that fits your needs. Will it always work? No, because needs change and life happens. What you want to do is create a budget that you can stick to, but allow room for those changes that will ultimately take place.

What you are doing is creating a plan that ultimate budget, so be prepared to stick with it for the long run. Don’t get discouraged if it doesn’t work very well for the first several months. It takes time to create new spending habits as your income fluctuates. After all, you didn’t get into this financial rut over night and you won’t get out over night. Here are a few tip’s to help you create a realistic budget.

Base your income and expenses on reality- Do not create a budget on estimates. That is where people fall short and why the budget doesn’t work. Start by reviewing and listing your spending for the last three to six months. I know this may be time consuming, however, you won’t get a full picture by only writing what what you spent for one month. You may forget transactions that only happen on a quarterly basis, such as, an oil change or income bonuses at work. Be honest with yourself so you don’t leave anything out. You want your budget to be as accurate as possible to make sure you actually stick to your monthly spending goals. To do this, you need to base your budget on reality using correct figures.

Choose your method- When it comes to methods, there are a myriad of way’s and plan’s you can use, your choice is important. You may want to try them out for a few months to see what works best for you and your family. Below are a few plans you can choose from.

  • The 50/30/20 rule- This rule breaks down your spending habits into 3 categories with certain percentages. This method, based on your income, essential expenses, such as, utilities, food and shelter make up 50%of your spending. Unnecessary expenses, such as, cable, internet and cell phone make up 30% of your budget. Your future goals, such as debt repayment, savings, and retirement funds make up the remaining 20%.
  • Fixed and variable expenses budget- This method divides your budget into two categories, fixed versus variable expenses. You can only lower the payment of fixed expenses, like car insurance, or mortgage payment, so much, but eating out expenses and entertainment fall under discretionary spending, which can be cut back if needed.
  • Bare bones budget- This budget is based on your lowest possible monthly income. If you are self-employed, or work a commission based job, this type of plan may work best for you. Create a plan based on absolute necessities that you need to survive, with any other money seen as gravy.

Find a tracking method- Now that you have calculated how much you spend, what your income is, and come up with a plan that works for you, it is now time to decide how you will track everything each month. Are you the tech-savvy type and prefer to track your daily spending on a mobile app? Or maybe you would prefer the old fashioned way where you carry a notebook and record your transactions. Either way is fine, it is up to you. If you are tech-savvy, here are a few options that I find helpful.

Again, you may need to test out a few online tools or spreadsheet templates to see what works best for you. Once you find one, stick with it.

I have included my free budgeting ebook for more information on creating a budget specifically for you, click below to receive.

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Click To Download Free E-Book


If you need further assistance in crafting a budget that works for you then book a consultation with me.

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