My most highly requested blog post EVER. Here you go, people.
1// Write down your expected income for the month
Write down all of your expected income for this month. The key is to get this as H I G H as you possibly can. Working overtime, attending paid training, selling things on eBay or Facebook marketplace, or picking up a second or third job can all make this happen. The higher this number is, the faster you will be able to pay off debt/save.
2// Write down all your ESSENTIAL bills
Write down the expenses that are essential. Rent/mortgage, electric, water, phone bill, insuranc ARE essential to live. Cable, internet, Spotify, etc. ARE NOT ESSENTIAL. If you do not need it to survive, it does not go here.
**DEBT PAYMENTS DO NOT GO HERE.
3// Write down all your ESSENTIAL spending
Write down everything you need to survive that is not a bill but is something like groceries and gas. Clothing, haircuts, date night, coffee money DO NOT GO HERE. If you do not need it to survive, it does not go here.
4// Assess your ESSENTIAL expenses
Look at what you are spending on absolute essentials to survive. You HAVE to make these payments each month or you won’t have a place to live or food to eat. These are your essentials. You cannot worry about paying off debt until you make sure you and your family are taken care of. YES, these come before your debt payments or anything else. And yes, they all must be paid for in cash (or on a debit card). They may NOT be paid on a credit card!
5// Write down all your NON-ESSENTIAL bills
For us, this includes everything from our Spotify subscription to our student loan payments to our internet bill. These are things you can CONTROL. You want to get this number as low as possible. What can you cut out? Can you cancel your cable subscription? Gym membership? What needs to go to get this number as low as possible.
6// Write down all your NON-ESSENTIAL spending
This is the real “budgeting” part. You are 100% in control here and you decide how much or how little you spend. You decide what you are going to be spending on. This is the secret sauce, people! So listen up.
This is where we have things such as eating out, date night, clothing, household, gifts, classroom supplies, coffee money, pedicure money….literally anything that isn’t going to kill you if you took it away. You decide how much you spend per month on this stuff. Try to get this number as L O W as possible. What can you cut out? What can you cut back on?
I once went two years without a manicure. I shopped at Walmart for clothes. Our eating out included Chick-Fil-A once a month. We only did date nights that were free. I only went to Starbucks if I had a gift card. Was it the most fun in the world? Definitely not. Did it help us become credit card debt-free and pay off a huge student loan? YES.
7// Add up all your essential AND non-essential bills and spending.
Add up all the money you are expecting to spend in any way this month.
8// Income - expected spending = $$$$$
Subtract your expected spending from your expected income. What are you left with? Whatever number you have, THROW THIS MONEY ONTO YOUR DEBT (or into your savings, depending on your goal!) This is how we paid off so much debt so quickly. It really works. Get your income HIGH and your spending LOW. Use the extra money to throw it in mass chunks towards your goals. (I usually take a small portion of the leftover money to add to our savings, while throwing the rest at debt. You cannot focus on saving a ton of money and paying off a ton of debt at the same time. You have to pick one. So we put a little in our savings and throw the rest at student loan debt)
Here’s a BUDGET PRINTABLE FOR FREE that is hopefully super helpful! Let me know your feedback!