May 21, 2024

Balancing the Budget

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One of the first steps in getting a hold of your finances is finding where all of your money is going.  The only way you’re going to do this is through work.

Write it Down

The first thing you need to do is to write down every expense for a whole month.  There’s no way that you’ll be able to come up with a budget unless you know how you’re spending your money.

The neat thing about this process is that it will cause you to focus on what you’re spending your money on.  This may be the first time that you’ve actually been aware how much you’ve been putting into that vending machine at work (and onto your hips because of the calorie count!).

After you’ve done that, you’ll then be able to break down what you spend and put it into categories.

Discretionary Spending

There are certain things you have to pay.  Your mortgage, your utility bills, etc.  These things are non-negotiable and are the first thing that you should put on your budget.  If you have credit card or other debt, you’ll need to put down the minimum payments in this section—we’ll work on putting extra on it a little later.

Next, we’re going to look at discretionary spending.  You need groceries, you don’t necessarily need to be eating out.  You should prioritize things you need versus things you want.  The point here is to budget enough for you to live for the next month, so that at the end of the process what you brought in as income is what you spent (every last cent) on paper before it’s spent in real life.

The Debt Snowball

If you have debt, you take the money left over after subtracting the above from your income, and you place it toward the debt that you owe the least on.  That way, when you’ve paid this off not only will you have more to pay toward the next, but you’ll be rewarding yourself by getting something done quickly.


If you don’t have debt, you should be saving an emergency fund, or for retirement.  There’s always something to be saving for.  You need to get into the mindset that says that you’re only going to spend what you have—not spend someone else’s money.

Do that, and you’ll be on the right track for budgeting and having financial peace in no time!

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