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The Forgotten Budgeting Step (aka "Budget Insurance")

This Simple Step Will 100% Guarantee Your Budgeting Success!

"Why is budgeting success important", you ask? I'm no statistician, but I can tell you that, every single one of our financial coaching students (hundreds at this point) who have successfully paid off their debt say that it's "IMPOSSIBLE" to do it without a budget.

That's right, all of them bar none, say that it’s NOT POSSIBLE to win with money without living on a budget. No matter how smart we think we might be or how much we “got this”, more often than not, an actual, detailed, written budget will prove us horribly wrong.

SO, that said, setting up the budget and purposefully rewriting it every month, staying on top of expenses, those are incredibly important.

BUT, the one thing that most people miss in this process is the “all important” pre-budgeting step of listing out all of your bills, expenses and debts, organizing them by date and THEN plugging them into the budget.

This one, seemingly “unimportant” step serves the purpose of breaking what can be an incredibly overwhelming process (i.e. learning how to budget) into smaller, bite-sized, more manageable pieces.

So let’s jump into the pivotally important “pre-budgeting stage.

By the way, if you want a downloadable PDF of this blog post, you can get that by clicking here: The Forgotten Budgeting Step (aka "Budget Insurance") Downloadable PDF

OR by clicking the image below:

The Forgotten Budgeting Step

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.

 

How To “Pre-Budget”  

(i.e. making a list of all bills, expenses and debts)


1. Take a deep breath. Depending on how organized/disorganized you are, this might take more than one sitting.

Don’t worry it’s normal. Rome wasn’t built in a day and MOST of our students don’t remember ALL of their bills, expenses and debts the first time through.

If you’re prone to overwhelm, I highly recommend breaking this exercise into 25 minute time blocks. Here’s a free 25 Minute Time Block Strategy resource that will tell you how to do that.

 

2. Gather all of your materials including the "Everything I Owe" PDF Worksheet

  • Start by “brainstorming” all of the bills you can remember. The following steps are meant to get the wheels turning and to help you find all the “nooks and crannies”

  • You may want to print off a couple of copies of the "Everything I Owe" PDF Worksheet as you will likely rewrite by “due date” after your 1st draft “brainstorm”. 

  • Also, as a way to “jog” your memory, go ahead and download our Budget PDF Form. The categories may help you to remember things you might otherwise forget.

  • Make sure to include “due dates” with every expense you write down. We’ll organize them by date later in the process. This part is all about “getting it all down on paper”.

  • Gather up all of the following you can:

    • Bank statements and log into all of your online banking accounts.

    • Credit card statements and log into your online accounts.

    • Mortgage/2nd mortgage/HELOC/HOA statements.

    • Car payment stubs 

    • Student  loan statements

    • Personal loan statements 

    • Rental invoices

    • Utility bills (electricity, water, sewer, gas, pest control, internet

    • Insurance invoices (home, car, health, life, disability, identity theft)

    • Car maintenance, oil change receipts.

    • Grocery receipts 

    • Restaurant receipts

    • Gas receipts

    • Travel related expenses

    • Cell phone

    • Medical related expenses (doctor visits, chiropractor, medications, supplements)

    • Irregular expenses like: gifts, back to school, seasonals

    • Miscellaneous… 

 

Do you "get down" with Pinterest? Would you share this on one of your boards for me?

 

 

3. Write them all out in your "Everything I Owe" PDF Worksheet making sure to include the bill due date.

Again, set that timer for 25 minutes if you start to feel overwhelmed and take a break for 5-10 minutes and then get back at it.

Don’t worry, it’s not going to be perfect the first time. Remember, this is just the first draft and it will get more and more accurate the more times you rewrite it (just like budgeting).

 

 

Here's a "livestream"  session I did that walks you through this process in the context of the 2020 financial crisis.

 

4. PRO STEP: Now that you’ve “brainstormed”, go back and rewrite all of your bills, expenses and debts in order of due date and/or write them out on a monthly calendar.

Don't be afraid of rewriting. Rewriting is a hallmark of all steps of the "learning to budget" process. Shun, the "set it and forget it" mindset. It will not serve you.

Instead, resolve that you're going to do "whatever it takes" to become successful at this and I promise you, you will!

 

5. NOW, you’re ready to put all of those bills, expenses and debts into a written budget.

You can learn more about how to actually budget at this blogpost and/or by watching the video below.

 

And again, if you want a downloadable PDF of this blog post, you can get that by clicking here: The Forgotten Budgeting Step (aka "Budget Insurance") Downloadable PDF

OR by clicking the image below:

The Forgotten Budgeting Step

  

You're Well On To Erasing Your Debt!

 This is the blog post that outlines the 8 steps I followed to eliminated $43,000 in debt in 2.5 years.
 
 
And whether this is your first or thousandth time on the blog, I want to make sure you have this “8 Steps” framework that ALL of our content is centered around. 
 
These are the steps I personally followed to obliterate $43,000+ of debt in 2.5 years
 
Maybe your number is bigger, maybe it’s smaller. Either way the principles are the same and I want you to have them.
 
0. Stop All Retirement Investing (Until Step 4)
2. Starter Emergency Fund of $1000
3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)
4. Full Emergency Fund of 3-6+ Months’ Expenses
5. 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 Mortgage
8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!
 
I’ve created a simple, easy to follow guide that you can use as your foundation as you navigate the absolute annihilation of your debt forever. 


  

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When You Need More Help

And again, if you’re looking for some resources to get started, you can download our free budgeting forms. Also, if you’re in a place where you’re ready to kick your debt in the teeth, here's the link to our free “8 Steps To Erase Debt” guide for you to use as your foundation.
 
To your freedom,
 
Brad
 

This page may contain affiliate links, which means Zero Debt Coach will receive a small percentage of any product or service you purchase using the links. You will pay the same price for the products and services, and your purchase will help keep this website up and running. I only recommend products and services I know and love on this site. Thank you so much for your support!

 
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