Do you run out of money before you run out of month?

girl shaking piggy bank upside down

Twenty-nine dollars.  That was it – $29.  That was all I had left in my checking account and I was proud. It was when I first got married.  We had made it through the month and after everything was paid, we had $29 left.  We had paid the mortgage, set aside money for insurance, bought groceries, paid our utilities, had a little money for spending and even saved towards retirement (thanks Dad for teaching me to save early). And we had money left over.  It was a good feeling.

To stay in the black when it comes to your money takes a little work.  That elbow grease is certainly worthwhile.  I look back at the days when I felt rich when I had $29 and wish I spent a little more time these days budgeting and watching every penny so that I could save more.  Seems like money slips through your fingers like water.

Sadly, convenience seems to have had a negative impact on budgeting and savings!  Everything is electronic now.  No more standing in line to deposit my paycheck – just have a direct deposit.  No more having cash in an envelope for each budgeted item – just pay on your credit card and earn points.  No more going to the mail box and finding bills to pay with handwritten checks – just get e-bills with your online banking. All of that convenience is great, but it keeps me from feeling connected to my money.  It is much easier to spend on a credit card than it is to let go of cold, hard cash!

If you at the end of every month you wonder just where your money has gone, budgeting is the place to start.  For this to be effective you have to disassociate yourself from the emotions of money and you can’t be too hard on yourself either.  You have to look at this from a business point of view so that you can make good decisions.  I read a study once (I’m a voracious reader.  However, I can’t always put my hands on the link, book or study when I want to share it.  This is one of those cases.  You will just have to take this for what it’s worth) that said if you put a baby in a playpen they will go right up to each and every edge.  If you put a baby on the floor in the middle of a big room you might think they will explore the entire room.  But, the study showed that the baby stays in a space smaller than the playpen.  Without guardrails, they don’t feel as safe and don’t explore as far.  I think this lesson applies to our money.  With guardrails in place, we are free to enjoy life.  Without guardrails, you can be spinning out of control and have no idea where your money went at the end of the month.

How do you set a budget?  Where do you start? What kinds of things should you consider?

earnings girl at table with tea

Step 1.  Figure out how much money you make

Gather up your tax returns, your paystubs, your bank statements…whatever it is that shows you accurately what income you have each month.  Be ruthless here, look at what kind of income you have.  Is it recurring (will you get it each month)?  Is it variable (the amount changes based on an underlying factor like your sales or hours worked)?  Make sure that the income you use is going to be there.  If you have a job where your income is variable or you are self-employed, look at what you made over the last year or two and take a number that is less than that… are putting yourself on a salary; anything you make over this number is gravy.  After having gravy for a few years, you can give yourself a raise.

Should you give yourself a raise? Click To Tweet

Step 2. Deduct out what comes out of your paycheck

Look at your income you calculated in the last step.  The gross number is a lot larger than what gets deposited into your bank account.  You have to take this into account.  So figure out what you pay in taxes, insurance, 401K, etc. before you ever get a dime.  My advice here is to make sure you are maximizing your 401K.  Many employers have a match of some kind.  If you don’t contribute, you are throwing money away.  You wouldn’t turn down a raise so why turn down an employer match to your 401k?  In addition, money put into a 401K is pre-tax, so it doesn’t hurt as much when you take it out.  Bottom line, if you can save something you should!  After you figure this out, you have your net income number.


PROTIP Maximize your 401K; it’s like giving yourself a raise. Click To Tweet


pen on notebook

Step 3. Figure out your expenses

This is often the hard part.  I suggest you start with your recurring expenses; rent, car payment, student loans are all examples of regular recurring payments.  Then take an average of your semi-recurring expenses; think utility bills, car insurance, daycare, prescriptions and the like. Then spend a week writing out everything you spend (or go back through your bank and credit card statements) so you can come up with a good average of what you spend on other items like groceries, eating out, clothing, entertainment.

Step 4. Write your budget

Once you have done the hard work of gathering all of the information, this is actually the easy part. Fill in the blanks on a budget form.  If you add up everything and you have money left over, go back and add that money to a savings plan.  Every penny should be allocated to help keep you accountable to your budget.  If you add up everything and you have more expenses than income, take a look and see where you can cut back .  If that seems insurmountable, reach out for help.

calculator balancing money and potatoe

Step 5.  Put your plan into action

A plan doesn’t do you any good if you don’t execute on it. Print your budget.  Have subtraction lines so you can account for what you spent.  Stop spending when that category runs out of money.  If your grocery budget runs out, you might have to switch money from entertainment to food.

5 easy steps to create a budget Click To Tweet

This is a learning process.  Don’t be afraid to step back and make changes.  The more you refine your budget, the more success you will have, and the faster you will reach your financial goals.

steps to create budget

If you have a burning question or just want to chat — I love to be social……you can reach me on Twitter (@ChrisellaLoans), Snapchat (Chrisella2), CyberDust (Chrisella), email, at the office at 912.721.9400, and my website. Find out more about me and more ways we can network (Facebook, Instagram, Twitter)

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27 thoughts on “Do you run out of money before you run out of month?”

  1. Budgets and plans are a straight forward way to make sure you’re on track to meet goals. And for those who don’t have financial goals, it’s a good way to make sure they’re not throwing money away.

  2. Great way to plan a budget, Christy! It really is simple. Unfortunately, simple doesn’t always translate to easy, especially when it’s the pocketbook issue 🙂 But these tips will keep anyone on track!

  3. This is great advice. I totally agree. Saving is so important. We needed to reduce our 10% retirement savings for a few months but hopefully this year, we will be able to increase it. We shall see. Thanks for sharing great tips.

  4. Christy – Now that I’m 7 or 8 years from retirement, I’m trying to live off the budget I think I’ll have at retirement – when there’s not this much $ coming in. It’s an eye-opener but we seem to be making it.

  5. The steps to saving seem so simple and yet so many people struggle with this. Having a clear idea of what you are saving for can help a lot. It’s also important not to give up and get too discouraged when things don’t go to plan because of some unforeseen emergency. You’ve offered a really clear way for people to spend wisely.

  6. Some great tips here – thank you. I am mostly on top of the money game at my house but always on the lookout how to make it grow. And yes, the 401K matching is a huge perk that should never be ignored..I did that once early on because I didn’t get it. Later I did get on board and the joy of seeing that money grow so fast will make a believer out of you!

  7. Agree it is important to have a good understanding of the money you have coming in and the money you have going out. This works well for people who are earning an income and often for people who freelance or who are building businesses, it is challenging to have a clear picture of what their income will be. And as far as expenses…hmm. Because I own a home I’ve been in since 1983, I have already had some unplanned for expenses this year. It feels to me like that is how life is now for many people. There is not a lot of certainty and having an overarching plan, at least helps to see the bigger picture, but always plan for the unexpected. Thanks for sharing the tips, as there are a lot of people who probably are winging it when it comes to their money, so it is good to see the whole and then define the parts that make up that whole.

  8. I haven’t used an actual budget in years. We live well within our means with no debt. We have saved a very nice amount for retirement. But just few years from my husband’s retirement, it was a rude awakening to see that there are some categories on a budget sheet that I could not fill out accurately when our financial advisor gave me the task. Circumstances and income can change. If we’re not on top of our money all along, it can be very difficult to weather the changes.

  9. A great reminder Christy, sometimes we get lulled into thinking we have enough money saved, or we are putting enough away for retirement. One of the things hard to gage is inflation, so you have to factor in some extra savings as well. The important idea is to have a financial plan and stick with it because one day you’ll wake up and be glad you saved so much.

  10. Hi Christy 🙂
    Awesome tips for how to figure out money 🙂 Budgeting is an excellent way to make sure you will be in the “black” always in your bank account! Thanks for the reminder!

  11. Several of my clients are creative entrepreneurs and one of the most important problems for them seems to be dealing with their money matters…and there is ignorance there. They have no budget that they control every week/month.

  12. Hi Christy,

    I am not a planner but when it comes to money, I make monthly plans. Do you remember when we were kids and we had our piggy banks? I do the same with my money. When I have coins, I put them in the little piggy. The savings in the end of the month are impressive! There is always something great to learn from children.

    Great advice and post, thank you!


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