Take Back Your Finances Challenge #3: Set Your Budget (Unique Approach for Success and Free Download)

Friends…are you ready?  Are you ready to set your budget? We know, these words can sounds horribly daunting and perhaps brings back many bad memories for some of you! At least that’s how we used to feel about setting a budget in our unthrifty days! We tried so.many.times. to set a budget and stick to it! We stunk at this task. We seemed to work to get it set up and all in order…just to quickly fail.  Talk about a daunting task!

Well, we have good news for you! We created an approach that finally worked for us many years ago and one that we find sets you up for easy success.  Remember, our philosophy in the many areas of life has been baby steps.  In all things that we do, we just don’t want to jump all in for short term success, we want to set ourselves up for a lifetime of success and make those changes gradually.

We have to give you that background and understanding because our approach is VERY different from many approaches that we have seen to setting a budget.  It might seem silly, weird, unusual and just plain mind-blowing at the simplicity of it.

Many of us have in our minds the ideas of how much we want to spend in each area or how much others out there say we should be spending. But let’s be honest, no two families are alike and no two budgets are the same.

Don’t focus on what others’ budgets are, let’s just focus on gradually getting your family’s budget to it’s rock bottom.  That is the end all goal – achieve the rock bottom budget for your family. But it is very important to understand that this will take time – at least give it the time it needs to be successful!

Before we share the download and details of the approach, you need to read about the approach first. We have already written about this approach in a couple of different places.  There is no need to re-write it here, but rather your first task for this week is to read these two articles to understand the approach.  Then your second assignment for this week is to actually set your budget with the free download provided below (and/or using online tools mentioned).

This week’s Assignment #1 – Understand Our Unique Budget Setting Approach

Please take the time to read through this articles and understand our unique approach to setting a budget:

• It’s Here! Our Secret 2×2 Formula We Used To Pay Off $1ooK of Consumer Debt (there are additional links within the article about why other approaches did not work for those lifelong financial changes)
• How To Set an Effective and Successful Budget

This week’s Assignment #2 – Set Your Budget Using Our Unique Budget Setting Approach

So, after doing assignment #1 – we hope you understand how this approach works and you also caught a glimpse of what we are going to do with the budget…but again don’t stress about the next steps with this budget.  Only focus on setting your budget this week based on the actual expenses you have made in the past few months. Like we said and whether you like it or not – what you are currently spending is your budget by default!

Well, let’s get it down in writing and see the numbers come into play! A visual ALWAYS helps to provide more clarity, motivation and understanding with knowing where you are going.

Here’s how this works:

• With what we are showing and providing today, this is called a “high level view.”
• It is not meant to track your budget – we do not recommend a paper system, but utilizing either software (like Quickbooks or Excel) and/or free online tools (like Mint.com)
• This is a quick reference, quick glance guide to go into your home binder.  The purpose of the quick reference is so that you can have access to it quickly if you want to know what is budgeted for a certain area, or if let’s say you get a new car insurance quote, you can quickly glance at this to see what fees you need to beat.  Or even if you are looking to earn extra money and you want to try and pay this week’s or month’s phone bill, etc. you will quickly know what the goal is.
• It is also super helpful to have the budget line items broke down by week, month and year for lots of reasons.  But for one, if you do get that new car insurance quote and you are quoted an annual fee, but you only know the monthly, it can be more difficult to figure out the best one quickly.  That is one of many examples of why we encourage you to break it out this way.
• Download this as many times as you need throughout the year for an updated current copy in your home binder.

First, print off 2-3 downloads or download the spreadsheet (private and only viewable by you on your computer) so that you can create separate pages for each of the following categories: Bills, Debts (write down minimum payments – we will get to more debt-reducing soon!) and Living Expenses.

Then just simply fill them out filling in the amounts with what you spend RIGHT NOW (not goals for how to decrease spending).  This is the difference between our system and others you may have used – remember, we are establishing your baseline and make sure to read the articles above for complete explanation.

Instructions for the Downloadable Forms:

1. You might find it easiest to fill in the monthly first as most bills/debts are in monthly amounts.
2. And then multiply by 12 to get your annual.
3. Then take your annual amount and divide it by 52 to get your weekly amount.
4. Then write the totals at the bottom.

Instructions for the Downloadable Spreadsheet:

1. Change and populate the bill and monthly amount on each tab (Bills, Living Expenses, and Debts)
2. The weekly and annual amounts will be update on each of the tabs.  No need to change those amounts
3. The summary tab on the spreadsheet will be automatically updated as well – nothing to update
4. Print out the spreadsheets (if desired) so you can track in your household binder

Here’s examples of the printable forms. This is not our budget, but we just filled this out quickly to show you what we are talking about with made-up examples. But even though these are just quickly made-up, we have shared our actual living expenses budget with you the past couple of years. 

Sample Summary Budget Spreadsheet

Sample Bills Tab in Budget Spreadsheet

Sample Bills Budget Form

Fill this one in with your bills that are non-debt (except your mortgage as this is technically debt, but we are going to put it here for now) and that you can’t live without and are fixed (billed) like your utilities, mortgage/rent, etc.

Here’s a sample of the Living Expenses Tab in Budget Spreadsheet

Here’s a sample of the Living Expenses budget form

This is for those expenses that are not “billed” but that you have has a normal living expense and that you can control each time you spend, such as your groceries, clothing, eating out, etc. Again, this is going to be the category that you are going to primarily apply the unique approach shared above. The bills and debts expenses are more of a fixed expense – we will be talking about how and where to drop these, but the living expenses budget is the most flexible and the one that can vary greatly and the one we need to get down on paper and fully see and understand what we are spending our money on!

Finally, if you have any debts, the fill-out this tab in the spreadsheet as well!

Finally, if you have any debts, the fill-out this form as well!

These would be loans, credit cards, and the expenses that once they are paid off, they are gone. We have several more topics/assignments on debt, this is just a pre-cursor!

	<== Download your printable Budget Spreadsheet (MS Excel 2007 and newer) HERE
	<== Download your printable Budget Spreadsheet (MS Excel 97 – 2006) HERE
	<== Download your printable Budget Form HERE

Again, just print the spreadsheet or form above in as many copies (at least 2, maybe 3 or more with debts or bills past the given lines) breaking out your bills, living expenses and debts on separate pages.

Once you have these two assignments done this week, we have laid a decent foundation with this task and last week’s goal setting task and we are ready to make some practical steps starting next week!

We look forward to making this the best financial year yet and making some real and positive changes!

Do you need to catch up?  Come join us on this challenge from the very beginning by clicking on the 52-Week Take Back Your Finances Challenge and sign up to start receiving your automated challenge from the very beginning!

One final thing….. we also have a Facebook Group where you can engage in discussions, receive encouragement and talk to others that are participating in the challenges too for more ideas! Head to the Be Intentional with The Thrifty Couple Facebook Page HERE and ask to join us there! You can also invite friends and spouses too!