Creating a killer foolproof budget is everyone’s worst enemy? You hear the words make you want to cry. You don’t know that budgeting is the first step to fixing your financial mess.
A study showed that only ⅓ of Americans keep a formal budget. Only 30% of Americans have long-term financial plans. That is mind-boggling!
We are afraid of budgeting. It could have to do with looking at ourselves and taking responsibility for our actions. We live in a society where it will eventually have to go away if we ignore it, right?
Wrong!
Here is how I made a killer foolproof budget and how you can too.
What is Your Take Home Pay?
You have to look at what your take-home pay is. This will be easier for those with a set schedule, so you know how much you make in a month.
This can be a bit more difficult if you are like me and work from home. I recommend putting an average of what you make in a month.
Again, if you are like me and are a freelancer, take-home pay is entirely up to what YOU do and turn in; I recommend waiting to figure out your take-home pay until later.
Write Your Bills Down on Paper
I am going to emphasize the paper part. Do this on paper. Don’t sit at the computer and input them in. Paper. Paper. Paper!
You will want to grab a few sheets of paper to complete this process. I always write my bills down from what’s due from the first of the month to what’s due on the last day of the month.
You can even list the date your bills are due. This will help cement them in your brain for later use. Trust me; there is always a method to my madness.
Don’t add food, gas, or entertainment to this just yet. Just write down the bills you pay monthly, such as your utilities.
Add Up Your Total
This is pretty self-explanatory if you ask me. Add up the total you have right now. Keep in mind these are just your monthly bills. Nothing more.
Analyze What You Have This Far
Take a moment to look at what you have this far. This is what you need to keep lights on, a roof over your head, internet, phones, etc. This is the spine of your life.
How much money do you have left after paying for your “spine”? Would that be enough for your other things, such as gas, food, savings, etc.?
Let’s find out!
Add in Your Various Other Needs
What I mean by your various other needs is everything you need to live. Here is what your budget should contain, or at least what mine consists of:
- Gas
- Allowance
- Food
- Animals (food, grooming, etc.)
This will vary from person to person. I will say for any successful budget, you will need an allowance. This allowance will be your money to do whatever you please with it. Without having an allowance, you will eventually cave into spending, and it may end up being worse than where you are right now.
Remember that your various needs do NOT require any savings funds. That’ll be coming up later.
Add Up Your Total
Now, you will want to add up your final total on your paper again. Remember, this number you have right now will cover keeping your home up and running but keep you clothed, fed, and have gas for your vehicles.
Analyze What You Have This Far in Your Budget
You are probably tired of analyzing what you have, but you must do this. I promise this entire afternoon or evening of getting your killer foolproof budget in place will be worth the headache you are enduring now.
Take a good look at what you have this far. Make sure you have ALL bills and ALL various other categories. Don’t skimp out on ANY of them. I mean it. If you underpay a category, you’ll pay for that mistake later, which we are trying to avoid.
Look at your final number and look at your take-home pay. Is your final number less than your take-home pay?
If Your Final Number is Less Than Your Take Home Pay
You could do one or two things if your final number is less than your take-home pay. You could put that number directly into a savings account every month so that you would start your savings journey.
The next option is to look at your debt and decide to put x amount towards that. This will be entirely up to you. We will get into debt, talking and snowballing, along with how to properly handle that at a later date.
If Your Final Number is Higher than Your Take Home Pay
If your final number exceeds your take-home pay, we have a lot of work! This means you don’t make enough for your current situation. This is not necessarily terrible; there are ways we can fix this.
You need to look at your bills. Take a hard look at them. Do you have cable? If you do, cancel it. Let that free up $60 or more of your budget. Get Netflix or another streaming site instead.
Don’t be afraid to contact your internet provider and see if they have a special you can hop on to and save money. If you have a contract with your phone service, see their plans. They always add new plans occasionally that may be cheaper than you think. It pays to look.
You can permanently save money by shopping with the deals at grocery stores and using coupons and your share of rebates apps. Find recipes that are cheap and easy to help stretch your food budget.
If you’ve done all of the above and still fall short, the last option is to get a side hustle. If you work from home, this usually is easier for you than for those who work a traditional brick-and-mortar job.
What’s After Making a Killer FoolProof Budget?
Suppose you made it to the end; congrats! You’ve finally made your killer foolproof budget. This was the hard part. The next part is easy. Put your money where it belongs. Keep your allowance for your purchases, and you should be fine.
Put up your budget somewhere where you can see it. If you prefer, input it into a spreadsheet. Everyone loves spreadsheets. I currently use a little standard spreadsheet, which you can utilize. It’s manual, so you’ll have to input number after number.
It’s an excellent tool to get you in the habit of ensuring your money goes where it needs to go.
Bonus: If you are looking for side hustles regardless of your budget, please check out our 34 Ways to Make Legitimate Money Online This Summer and our 20 *More* Ways to Make Legitimate Money Online This Summer posts. These offer great opportunities for flexible income and schedules.
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