Steps to Financial Peace – Budget 101

Budgeting - expenses and calculate

Do you feel like you are limping from pay check to pay check? We’ve all been there. These 5 steps will get you to managing your money to know where every dollar is spent how you want it to be, including fun items. Without a budget, you can make more money then you did years ago and still not be making ends meet. Many people spend more as they earn more. It is similar to the more space you have in-house, the more items you buy because now you have more room for it.

Start now by getting some paper and something to write with. Don’t worry about making it pretty or researching which budget app to use right now. You’ll have time to do that in the future. Take a deep breath; you got this!

Income: Write down the amount you earn from all of your sources for money.

Net pay check – this is the amount that is paid to you after taxes, insurance, and other deductions

Child support

Other sources

Expenses: Write down everything you need to pay during the month. Be sure to include any of the categories listed:


Rent or Mortgage

Insurance – medical (if paid separately and not through your employer since your net pay check already takes that out), home, car, life


Eating out – lunches, dinners, coffees, etc.

Donations to church and fundraisers for school and organizations






Car payments


Other loans or debts

Repairs for house or car

Doctor bills




Hair cuts

iTunes and magazines

Pet supplies




Wedding or baby showers


Other special occasions like Mother’s and Father’s Day



School expenses

Household items like printer ink, light bulbs, etc.

Allowances to yourself, spouse, or kids


Net to zero: Add up all of your income. Add up all of your expenses.

Income minus (-) Expenses = zero (0)

Chances are this will not be zero the first time, so go back and see where you can reduce any expenses. I don’t think I’ve ever had mine zero the first time.

Record actual income and expenses.

During the month, set aside time at a minimum of once a week to update these and then readjust back down to net zero.

Repeat each month.

This will get easier each month for two reasons.

Better idea of expenses you have


Congratulations, you just completed a budget!

There will times when the budget does not go as planned. The fact that you realize that things are not going as anticipated is the first step to address this opportunity. Make the adjustments you can right then, don’t wait until the next month. The goal is to try to stay in the budget in each category, but things happen and we sometimes will go over in one category. If that happens, another category should be reduced by the amount overspent to keep the end result at zero. I find the biggest expense categories for my household is to reduce the eating out, groceries, entertainment, vacation, and clothes items. I started our budget on paper, but now keep it in an excel spreadsheet. There are many apps available as well. Keep your budget on whatever works best for you.

Budget writing expenses down

Some people shy away of budgets since they think it restricts them from having fun. Notice that the expense categories can include those things like entertainment and vacation. The budget lets you control where things go because quite honestly it is the little dollars here and there that add up and you don’t even notice it. This is your money and you get to decide how to spend it!

How to budget

Do you feel like you are limping paycheck to paycheck? These tips will help you manage your finances by making a budget to plan where every dollar goes.