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How to Make a Personal Budget

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Making a personal budget can be intimidating and downright scary. Some of you may know that we’re on a journey to become debt free this year. Aaron and I have made some terrible mistakes when it comes to money (the biggest being trading in 10 cars in 6 years!). Yes, you read that right. 10 cars in 6 years. I almost vomit when I say the words out loud. One thing I learned to do years ago was how to make a personal budget. It was 2004 when I first heard of Dave Ramsey, financial guru, author, and talk show host. Although I learned how to budget, I didn’t take control of my emotional spending and entitlement. I thought because we started making more money, we deserved a new car. I could justify a new car all day long. Boy, was I wrong!

So now that I’ve mastered (self diagnosed mastery) how to make a personal budget, I figure I’ll share what I’ve learned. The first thing you’ll want to do is take out a notebook. Some people use spreadsheets and fancy software, such as Dave Ramsey’s Every Dollar, but I prefer pen and paper. It just makes my goals feel more real (if that makes sense). So grab your notebook and a pencil, gather all of your bills and recent paycheck stubs (or direct deposit amounts).

I create a budget every time we get paid rather than once a month. I just feel better knowing exactly what I have to work with every time we have money in our hands. Tomorrow is payday, so today I’m writing out my budget.

Here is a sample personal budget to get you started.

How to Make a Budget
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You can find so much more helpful tips on Dave Ramsey’s website (free) or you can purchase one of his books, listen to his podcast, or even borrow a book from the public library for free! It definitely helps to have a plan…to tell your money where to go. You work hard for your money! Make it work for YOU!

The purpose of a budget is to help you gain control of your finances. If you’re living paycheck to paycheck, you are at the point where you don’t have a choice! You must make changes starting today! And what works for one family may not work for you and vice versa. Once you start looking at your finances as a serious matter, you’ll start dreaming of all the things your money can do for you! For instance, once we pay off our debt and have a fully funded emergency fund, we will use ALL extra funds (that we used to pay towards debt) to pay off our 30-year mortgage within 7 years while saving for retirement and our kids’ college! It can be done, folks! You just have to put the effort forth and make a plan. I don’t like the phrase “stick to the plan” because it implies that the plan can’t be changed. Our budget changes once a quarter (at least). It may take a while to work it out, and that is okay!

If you’re looking for accountability with your spouse, I’ve put together this “contract” that is just between the two of you. Feel free to save it, download it, and share it! Sometimes making the decision and agreeing (in writing) to follow a plan for success makes it more exciting, and it becomes so much more than just a dream.

personal budget agreement
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