Budgeting moneyAs I swiped my credit cards day in and day out to keep my lifestyle afloat, I wasn’t doing myself any favors.  I had no idea what  my financial picture actually looked like.  I was spending blind and  happy with my ability to just pay the minimum payment.   Minimum payment after minimum payment, I was spending along with cruise control, not knowing where my destination was and not really sure how I was going to get there.  I had a problem, a spending problem.  The first step to fixing any problem is admission.  I had to admit to myself that I was spending my money without a budget.  I only knew how much I brought in and what bills I had to pay, but I didn’t go any deeper than that.  I needed a budget!

If you are like I was used to be, then you might not have a budget.  A budget is not just a spreadsheet with numbers on it.  It is your financial plan on how to achieve your goals.  Want to save more?  Want to spend less on groceries?  Any money decision you can think of should be drawn into a budget.  They are not just for financial gurus or the mathematically inclined.  Budgets are for everyone!


I had to admit to myself that I had no budget.  I knew where my money was going, but didn’t know how much and how each month was detailed.  I wanted to change my lifestyle and budgeting did that for me.  I came up with a simple spreadsheet that allowed me to input my income (paychecks, part time work, etc.) and list my expenses.  You can’t just list you bills in your expense column because that is not the whole picture.  You need to go back and add everything that you purchase per month on a regular basis.  Gas, coffee, medicine, gym memberships, and any other expense that you incur on a regular basis need to be entered.  If you want the see how your finances look, then you need to have the whole picture.


While creating a budget can be time consuming, it doesn’t have to be.  There are many free budget spreadsheets out there for download, but there are also many great tools online.  If you are creating your first budget, then I would recommend trying out this easy budget calculator.  This free service is provided by Advantage Credit Counseling Service and sets you up with everything that you need to create an awesome budget.  It walks you through a step-by-step budget creation from entering your income to breaking down each one of your expenditures, including all of your debts and assets.  After entering your information, you get a detailed look into where your money is going and what percentages those categories make up.  It is truly eye opening.

No matter what service you use to create your budget, I would recommend just starting one.  Many people that I speak to don’t have a budget because they think it is difficult or a waste of time.  I would highly disagree with those individuals.  How can you create a path to financial freedom if you don’t know where you are now?  Budgets are the insights into your spending habits.  If you don’t think you will ever stick to updating your budget, then I would suggest you create just one.  By taking the time to create one budget will give you more insight into where your money has been going and where you can cut back on your expenses.  A budget can be truly life changing and they are extremely easy to setup, especially with the free budget tools available.  Remember, the first step to financial recovery is to admit you don’t have a budget!

Image courtesy of Arvind Balaraman / FreeDigitalPhotos.net 

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  1. The main thing I have been doing the past 8 months is tracking my spending. I plan on using this to create a budget, but in the meantime I have been adjusting my spending each month as needed. I think it’s more important to be aware of how you are spending your money than it is to have a budget (but only if you adjust your spending based on what you find out!)

  2. Hah, I like the title. When I was training my fiance in the ways of financial security I explained budgeting as not a way to make you cheap but a way to keep you informed on your spending. It’s one thing to slightly go over a budget item due to circumstances and it’s another to have no idea how much you spend on anything and continue blindly overspending.

  3. Without doing things properly you are only fooling yourself. May as well do it properly or not at all in my opinion.

  4. “How can you create a path to financial freedom if you don’t know where you are now?” Great sentiment Grayson! I could not agree more and I think many that don’t budget build it up to be more work than it has to be. I know when I was spending like crazy I had no idea of really even having a budget or what it meant. I view it as having a plan for your money and deciding where you want it to go in order to work for you. There are so many ways to do one that really the main point is to start and don’t wait on starting.

    1. Thanks John. Budgeting doesn’t have to be hard. You don’t even have to update it all that often, but you should at least have one in order to plan your spending.

  5. Budgets are one area I defiantly need to work on a little more. I have a very basic budget but as far as having one that is detailed down to the penny, I’m not even close. I know the basic rough numbers but I feel a more detailed budget could benefit my so much more.

    1. Mine is pretty rough as well, but it works well enough for me. I don’t need the granularity that some people need. I have some free play in my budget and that is how I like it!

  6. When it comes to keeping a budget, it’s pretty black and white: you either do it or you don’t. But like you said, admitting you don’t is hard.

    On a month when I haven’t tracked my expenses perfectly, I’ll go back through to tally everything thinking that I pretty much know where my money went that month, but I’m always off! The only way to really have control is budgeting with exactness!

  7. It’s the little expenses that add up. When I didn’t know where my money was going, that was the biggest surprise! So much money wasted 🙁

  8. I do the bills are paid I don’t care like you, but add some financial goals as if they are bills, so in the end not too bad, but I have no idea where money goes sometimes. Good thing of joint finances I now have to justify what I spend or my BF won’t pay half of it!

    1. Yeah, joint finances can do that to you. My wife wouldn’t let me get away with just spending without justification. I don’t let her get away with it either.

  9. I don’t know how many times I’ve been told that budgeting was too hard or took too much time. Yes, it does take more than five minutes to do, but your financial lives – your well-being – isn’t worth the time? Yikes! It is easy to fall into living paycheck-to-paycheck and I think a lot of young people don’t worry about it because it seems like everyone does it. This is probably not the time to follow the crowd. I honestly find budgeting freeing, because now I know exactly where my money is going. If I don’t like where I’m spending money – I can change it.

  10. Great Post! It complements mine on starting a budget. But I really like the way you emphasize that before doing anything else you have to admit to yourself that you don’t have a budget! I missed that in my post 🙂

    1. Great post Jose. Thanks for stopping by to comment on mine. Most people will not admit that they don’t have a budget, but until they do, they probably won’t start one.

    1. It makes a huge difference. If you just start one, then you will be starting on a journey of controlling your finances better.

  11. My problem when I was living paycheck to paycheck was not knowing where my money was going. I had a budget, but it never worked until I was able to sit and looked at 6 months worth of expenses to figure out where I was spending my money and then attack ONE category at a time. It took us almost 2 yrs to have a fully functioning budget, but it is better than having a budget and not able to confine to it I guess.

    1. Thanks for stopping by Suba. It is good to hear that you worked hard on making a budget work for you. Tackling each category is important and will really bring tremendous insight into your finances.

  12. Your first paragraph describes the way we use to live too! The day we couldn’t do it anymore, sadly, was when I was robbing Peter to pay Paul, and that was only to make the minimum payments. Sad, but true.

  13. I’ve been in no budget land before. It’s not a great place to be, even if spend less than you earn.

    Just remember that budgeting is a process. It took me multiple iterations to get a budget that was reasonable. Don’t be afraid to continually revise and rework, especially over the first year. Once you get to years two and year three, you’ll have something that reasonably reflects your income and expenses and can act as a solid spending guide.

    1. Spot on with your comment. You can’t implement a budget over night. You will never succeed if you think that you will get it right the first time.

  14. We certainly did the minimum payment thing for years. Only by taking control and making a plan have we gotten out of that cycle. You can’t be a budget whiz overnight, but it can be done if you really want to change.

  15. I was once in that place where I thought I knew where my money was going, I’m not in debt so what do I need to worry about. Well all that changed when I started to use a budget, wow. We save much more money now that we know where our money is going and that the spending has some sort of control method to it as we track every expense and have only x amount to spend. I’ve heard it all when it comes to budgets and have turned some into believers….

  16. I have a budget, but don’t find it particularly helpful with meeting my goals. It’s there, it tells me how much I spend (or should spend) on something each month, but the action isn’t in the budget itself, it’s in my attitude and my desire to spend less. It’s a helpful tool to see where you’re overspending, though.

    1. No matter if you have a budget or not, it will always break down to your attitude and desire. A budget at least shows you where your money should go and then you can dictate if you want to follow it.

  17. Great post, Grayson..
    Making a budget was a harsh does of reality for us back when things were hairy.. but it is a necessary step. You can’t turn the ship around unless you know exactly how much water is in there.

  18. Creating a budget to do confirm you are spending less than you earn is a fabulous first step. By looking at every line item under a microscope, you can decide if it really needs to say in the budget, if it could be reduced, or if it has to be cut even for the short term while you pay off debt. To me though, that’s only the first step. Now you need to figure out how it will work on a daily basis. For me a spending plan has been key. On a spreadsheet I lay out every week of the year in advance listing the dates pay will be deposited, the dates recurring bills will be paid, and pluging estimated amounts (based on actual history) for gas, groceries, utilities. Recurring bills are normally due on about the same day every month. If you are paid every two weeks, you can easily predict your paydates indefinitely into the future. Rent and mortgage payments follow a rigid schedule. These ins and outs on your cash flow aren’t surprises. By laying out the entire plan in advance with a running balance alongside (like an old fashioned check book) you can see the furute impact of adding any unplanned spending or extra contribution to savings. It’s great to know you make more than you spend every month, but if the mortgage, insurance and gas bill are all due on the 1st and you get paid on the 2nd, that’s probably even more important.

  19. For me it was never overspending per se it was ignoring my student debt (mind you we’re talking 100k worth of debt, some of which I charged on credit cards) I was totally living in denial about how my loans were going to get paid off. The worst thing I ever did was accept my debt and have no plan to pay it off!!

  20. But isn’t it possible that a person could be responsible with their money without having a budget? I work on a cash basis, so I do have a budget, but I think that if I had a higher income, I might not need such a thing. My deficiencies in saving money have always come from unemployment/low paying jobs rather than reckless spending.

    1. Yes, I think you can be responsible without a budget, but you would still not have the best control of your money. Having a budget is not just for financially strapped people, it is really for everyone.

  21. You are absolutely right. As soon as we worked out a budget, it was so much easier to get our debt repayment on track. I can’t imagine not living with one now.

  22. Thanks for sharing. I am part of that larger group that needs help on their budget. Living on minimum payments can be tiring.