"Budgeting is nothing more than making money out of the money you've already made." - Marcus Urbanski
"1 year = 365 opportunities to learn how to budget." - Unknown
"Becoming rich is hard. Staying broke is hard. Choose your hard." – Eric Worre
“You don’t have to see the whole staircase, just take the first step.” – Martin Luther King, Jr.
Getting started with budgeting is better "started" the "perfect". I often say that budgeting is like rocket science. Well... not really, but it's JUST ENOUGH like it to cause people to quit before they ever have a chance to get good at it.
You've got to start somewhere. I propose "somewhere" is this "Easy Budget".
And, I'm excited to do a "deep dive" into this basic budget, so you can get more control of your money.
Here's a free basic budgeting workshop that will walk you step-by-step through the process.
My personal conviction is that budgeting is the absolute most foundational skill you’ll need to start developing if you ever want to reach your financial goals (i.e. financial organization, getting out of debt, saving money for emergencies, investing for the future, etc.).
In fact, over the past decade all of our most successful financial coaching students have explicitly said that they would never have been able to get out of debt and start building wealth without a budget.
So, enough said about that. You’re here because you want to learn how to budget, so let’s dig in!
Go ahead download and print out this basic budgeting form (its in our free products & printables library.
As you’ll hear me say over and over, I recommend learning how to budget on paper for at least the first 90 days.
If you try to do this in and app or on a spreadsheet, you’re adding unnecessary complexity that may cause to throw in the towel and I don’t want you to do that.
I’ve been through this process with thousands of students and trust me, you’ll have the absolute most success if you start on paper.
Okay, enough of my soap box on that issue, let’s talk about what else you’ll need for this exercise.
Three points I wanted to emphasize before we jump into the budget.
Now, let’s jump into the actual budget.
This is obviously going to start with any job(s) income but also can include, extra work, side-hustles, child support, alimony and even income from investments and/or rental properties. This shouldn't take too long or be too complicated and you can always come back to it if you suddenly remember something you left off.
This part of the exercise will help you to realize why learning how to budget usually takes about 90 days. As you go through each line item, you'll likely be "guessing" at a lot of the expenses at first (i.e. groceries, restaurants, gas, entertainment).
Don't fret, this is normal. It usually isn't until the 3rd month of budgeting that our students have a more solid idea of what they're actually spending in certain categories.
Like I said earlier, a lot of this process is going to feel like you're "failing forward" and that's okay. Just resolve that you won't quit and that things will progressively get better and better as you go.
AND, just to make sure you're paying attention, I intentionally left a budget item off of this budget. Let me know in the comments section below if you pick up on what it is (hint: it's related to transportation expenses). :)
Okay, that's really the entire exercise. This is meant to be a "quick start" budget, so do the best you can and don't be afraid to rewrite as many times as necessary.
Pro tip: If you find yourself becoming too overwhelmed even with this budgeting exercise, you may need to press pause and do this step first: The Forgotten Budgeting Step (aka "Budget Insurance") Downloadable PDF
Remember how I said earlier, "this is meant to be a quick-start budget. We’ll move on to a more thorough monthly budget further on in the process"?
Well once you've gotten through an iteration or two of this basic budget, it's time to move on to my favorite budgeting method, the "Zero Based" Monthly Budget.
This resource will help you get into that when you're ready.
Don't worry about that too much right now. Just focus on getting this one down and then we can move on.
Once you've been able to get on and stay on a written paper budget for 90 days, that's when I say it's okay to start looking at programs and apps to aid you in automating some of your processes and enabling you to do some deeper analysis.
I've been using YNAB (You Need A Budget) for the past 6 years and it's taken Angelica and me from $43,000 in consumer debt to over $700,000 in net worth. They offer a free 34-day trial and I highly recommend their platform. I'm not sure what I'd do without it, actually.
Okay, I know that was fast but hopefully you were able to follow along. Congratulations if you’ve completed it along with me and don’t be afraid to rewind the linked video, pause it, slow it down, speed it up, until everything makes sense.
If you’re taking the $1k in 30 Days Challenge or completing the 7 Steps To Stop Paycheck To Paycheck Living, this initial budget will provide some excellent insights as to what you need to do for the next part of your journey.
So, the call to action for today is three fold:
Remember, especially with budgeting, practice makes permanent. So, don’t be afraid to keep rewriting. And let us know how it’s going in the comments below or over in the community.
Okay, that’s going to do it for this lesson. Thanks for watching and we’ll see you in the next one!
All of this consumption of content is great, but it's just "infotainment" if we don't put it immediately into practice in some way. If you hang out on my platform for any amount of time, you'll see that I'm big on "calls to action". Here's what I want you to do:
Go ahead and download this PDF that will guide you through this all-important process, you can get that by clicking here: The Forgotten Budgeting Step (aka "Budget Insurance") Downloadable PDF
Also, as an ongoing means of supporting your personal finance goals, I want to encourage you to:
1) subscribe to our YouTube channel for ongoing strategies and encouragement and
2) go ahead and join Zero Debt Tribe, our private Facebook community aiming at helping you to connect with others, to get your questions answered and to stay the course.
As always, please don’t hesitate to reach out to me at: [email protected] when you have questions, need help or just need someone to talk to during this difficult time. We love you, want the best for you and are here for you during this time.
Next, let's talk about how my free and complete system to master your money for good!
0. Stop All Retirement Investing (Until Step 4)2. Starter Emergency Fund of $10003. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)4. Full Emergency Fund of 3-6+ Months’ Expenses5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)6. College Funding (if applicable)7. Pay Off The Home Mortgage8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!
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