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5 Steps to Create a Budget + Change your Financial Life

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My mission is to help you create a business and life that you want: profitable, inspired and on your terms.  Give yourself permission to have the business you truly want. 


There was this very long stretch when I completely avoided my finances. I knew things weren’t where I wanted them to be so it was easier to just pretend there was nothing to see. 

If I didn’t acknowledge what was wrong, then it was as if it wasn’t real.

Part of me was scared to look because I was feeling shame, judgement for myself and real disappointment. 

Another part of me was avoiding the facts because I knew that once I understood the truth, it would be hard work to climb out of debt, start saving, spend responsibly while getting my finances on the right path.

And when I have these types of feelings I conveniently start avoiding taking action. 

Then these feelings create all sorts of thoughts about myself. It’s a vicious cycle. You know what you need to do but you just don’t want to really know because it’s not pretty. 

But then something happened. 

An a-ha moment when I realized that I can’t avoid understanding my money much longer. Too much is at stake.  

I know not taking care of my money is not in my best interest so there’s this little voice in my brain telling me that serious action needs to be taken soon. It’s telling me that it is time to change things up if want to live a fabulous existence and have enough money to support that dream for the rest of my life. [a little dramatic but oh so true]

So what are the first steps to living a fabulous life, being in control of your money and getting your finances in order? Using a budget to transform how you view your money and what you do with it.

5 Steps to Create a Budget + Change your Financial Life

  1. First and foremost. Draw the line in the sand. Decide that now is when you are going to change. Not tomorrow, right now. I remember the moment when I decided that enough was enough, I wanted a secure future. Deciding that NEVER AGAIN would I be at the mercy of not being financially secure was the best decision I have ever made. The goal was financial freedom and I was not turning back.
  2. Gather up all the $$$ numbers.
    • What is your income (salary, side hustle, child support, etc)
    • What is in the bank (checking, savings)
    • What is the total in your investment accounts
    • List your assets (house, cars, art, etc)
    • List your expenses (weekly, monthly, annually, leave nothing out)
    • List your debt (credit cards, medical bills, car payments, mortgage, etc)
  3. Create a budget.
    • Take all the numbers from above and itemize what is coming in and what is going out: Income and Expenses.
      • I do keep an old fashioned monthly budget printed and on my desk to keep me on target (and motivated). Click HERE to download my little budget creation. BUT I do recommend using budgeting software – very helpful for so many reasons and it allows you to take a deeper dive, looking at percentages, adjustments and annual calculations. So many to choose from – but Quicken has a (free) very user friendly version and of course Dave Ramsey offers a nice budgeting tool (both a free and paid version).
      • Coming up with a number for my income is always tough when I budget. We are self employed – so for the past 20+ years I have to go by monthly averages. [I will dive deeper into budgeting for self employed down the road.]
    • Categorize your expenses.
      • List your fixed expenses such as your rent/mortgage, utilities, car payments.
      • List your variable expenses like groceries, gas, entertainment and monthly subscriptions.
      • Don’t forget daily spending. That coffee on the way into work, lunch with co-workers, lottery tickets, whatever you spend what seems like small amounts on but adds up over the course of the month to a considerable amount.
      • If you are like me and use your debit card for everything then your bank statement should easily shed light on how much you are spending on these miscellaneous items. If you pay cash, keep receipts for the month and get a better idea of what are your daily miscellaneous spending patterns and add them to your itemized expenses accordingly.
  4. Set Goals.
    • Long Term Savings Goals. Retirement. College. Dream Life. There are all sorts of formulas for what you should be putting away each month. But here is where I don’t want you to beat yourself up. If you have not been saving regularly, it is not too late. With some dedication and resolve, you can catch up no matter how old you are or how far behind you think you are. [more on this subject later as well]
      • Ladies I have been exactly here. For whatever reason I found myself in the position of not having saved ANYTHING for retirement. I beat myself up with should haves and why didn’t I’s but at the end of the day I had not one penny set aside for retirement AND I was in debt. Clearly something had to be done. I had to change. And I did. Fast forward several years and I am no longer in denial, I became incredibly proactive and changed the path I was on. Now my personal finances are in order and I am armed with knowledge and opportunity. And living a life I love.
    • Short Term Savings Goals. Whatever these goals are, come up with your cost and add it to your monthly budget. Buying a new car [in cash of course]. Taking a dream trip. Renovating your bathroom.
      • Let’s say you want to take that dream trip to the Amalfi Coast with your 3 best friends. This is a trip of a lifetime and you want to start saving. If the trip is going to cost you $5,000 and you are leaving one year from today, then divide up the $5,000/over 12 months and add $417 to your monthly budget under the Short Term Goal: Travel category.
  5. Make a Plan.
    • Evaluate your budget at the end of every month and make adjustments as needed. Create the following month’s budget based off of the previous month. You will see where you can trim and make necessary changes. What you do with any money left over will depend on where you are in the financial journey.
    • First thing to do is create an emergency fund. Just as soon as you can, gather a $1000 into an account and DO NOT touch it unless you absolutely need to. This is the first game changer if you are not an all star saver (yet!) and want to be financially prepared when something urgent pops up. By having this amount of money and having it available for an unexpected expense (like a new set of tires, emergency vet visit, etc) you are less likely to use a credit card and increase your debt. Having this little cushion will potentially save you from derailing your financial progress.
    • Pay off debt. I personally like the way Dave Ramsey lays it out with his snow ball approach. There is something very gratifying about seeing your debts, lowest to highest dollar amount get paid off one by one. That momentum is really, really helpful. And it becomes a game of trying to get the debt wiped out as fast as possible. This is a real non negotiable for me. To have financial independence and really be living your best money life, you can not do this with debt hanging around. Trust me, once the debt is gone – all that extra money you paid out every month is now free to save. So imagine how fast things start to turnaround and get on track.
    • Fund a 6 month full emergency fund. When you have 6 months of living expenses sitting in the bank, untouched it gives you such a sense of security to weather any storm. But the key here is that it can not be touched for any non essential reason – such as a vacation, holiday gifts, a new boat. You get what I mean. This money just needs to sit there forgotten about.
      • I can’t tell you how this changed my life. Wow. Knowing I was not living paycheck to paycheck and I had a safety net if everything went sideways with the economy or our business was an incredible relief. Do you know how at ease we felt financially with this in place when Covid hit? Honestly there are no words. We were safe. We weren’t scrambling and desperate. We were going to be ok. Because we had no debt and 6-9 months of our monthly expenses in the bank we could sleep at night and know we would financially make it.
    • What are your savings goals? Do you need to save 529s for your kids? Retirement? Move to France. Create a charity. Personal project?
      • I needed to do a little bit of it all. I had kids later in life so I still needed to fund a 529 for each of them. I hired a certified financial planner to get me up and running with my retirement accounts. When that account was opened, I was embarrassed. I assumed the amount I funded my account with was the lowest amount he had ever seen. But guess what, who cares? I started with almost nothing. And now…If you have read any other blog post on my site – you probably know I am currently living in France. That was a massive goal. If I didn’t put it out there, then it never would have happened. I used budgeting, Dave Ramsey’s baby steps and changed my mindset around money. Transformed my life.
      • When it comes to savings for retirement or any other reason, have it automatically deducted from your account. If I had left it up to myself to cut a check or transfer money every month to my account I would have a fraction of the amount in my retirement savings. If it gets taken out I don’t think about it – the money just gets saved.

I know creating a budget does not sound sexy or exciting but it is one of the necessary steps to get you on the right path to financial freedom.

Creating the budget allows you an understanding of your full financial picture. And that is where the magic starts. It is the first concrete step to transforming not only your personal finances but your life.

Even if you are 50 with no savings or a saver but not an investor creating a solid budget can help see a much clearer picture of your relationship with money. This financial self reflection will open opportunity you didn’t even know was there.

The first budget will take a little bit but once you have it dialed in, the next few become easier and easier. Spending patterns emerge and you identify where you over spend and under save. It will give you clarity and knowledge. And that in turns gives you power. Power over your money.

Once I shed my denial and fear, my money success skyrocketed. [coming soon: more on how your earning potential increases at this time as well]

The key to success is resilience. Do not give up. It’s about time you made yourself your priority!

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