5 Easy Steps to Budgeting – Step 2

I’m answering one of the most common questions that people ask me – “how do I budget?” In Step One, I wrote about the negative feelings that people have when they hear the word “budget”. 

Just remember that a budget is nothing more than telling your money where to go

So let’s review before we move on to Step Two!

STEP ONE  Decide to decide
This is where it begins! You must decide to live differently and not paycheck-to-paycheck. 

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month
The key work in Step Two is “NEXT”. Preparing a budget for money you’ve already spent is not very fruitful. A budget must be completed BEFORE the month begins and BEFORE the money ever even ARRIVES!

The best way to stop saying, “I can’t believe I spent my money that way” and “I wish I could have that money back” is to develop a spending plan BEFORE the money is received that month!

So, what income will you receive during the next month?

  • Paycheck
  • Bonus
  • Side Job
  • Child Support
  • Alimony

If you get paid monthly or you have at least one month of expenses in the bank, we recommend you use our Monthly Budget Form (It’s FREE). If your income is unpredictable, write down the amount of money you can count on. (If your income is irregular or unpredictable, stay tuned for specifics of how to deal with that later this month!)

Monthly Budget - Income


If you are living paycheck-to-paycheck, all the bills probably cannot be paid at the start of the month. You will need to develop a budget for each individual paycheck. We recommend using our Weekly Budget Form (It’s FREE). Make the dates at the top of the weekly budget form match up to your income dates and enter the income in the INCOME section.

Weekly Budget - Income


Stay tuned for Step Three…


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