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How To Make A Budget That Will Never Fail Regardless Of Your Income

Dec 19, 2018 | Financial Freedom | 14 comments

Learning how to make a budget for your income + expenses is super crucial if you want to stop living paycheck to paycheck and reach your financial goals.

But, budgeting can be the worst, so people tend to avoid it.

I mean, did you know that TWO-THIRDS of Americans DO NOT have a budget?  That’s crazy, right!?

And, a huge, huge mistake.

Because, if there is one thing that you should keep organized in your life, it should be your money.

So, why do so many people treat their finances like they ain’t no thang?


Some of the links in this post are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission.

I’ll give you two reasons why people avoid budgeting:  budgeting is can be time-consuming and budgeting is can be stressful.

See, money is often the cause of stress, tension, and arguments between partners.  And, money controls most aspects of our lives + we always feel like there is never enough money.

So, why even bother with it all, right?  Well…not so much.

You 100% should bother with your finances, regardless of how ‘little’ or how ‘big’ your income is – you need a budget.

Because, without a proper budget + understanding of your finances, you will never (and I mean never) feel satisfied with your income and standard of living.

Oh, and you’ll be stressed out, fighting with your partner, financially unsuccessful, unable to save, bad at paying back debt, and the list goes on.

To make a budget, you need to:

  1. decipher why you need a budget
  2. how to make a budget (that is customized to YOU + never fails)
  3. how to automate your budget

Doing this will give you a clear understanding of your finances and the opportunity to afford your best lifestyle.

1.  Why do you need a budget?

So, I’ve already briefly touched on why you definitely need a budget (no matter your income) if you want to reach your financial goals.

But, in any case, these are the three main reasons why you need a budget:

1. To understand your finances + make strategic money moves (to afford your life with ease)

2. To pay down debt

3. And, to save for a house, emergencies, retirement, vacations, college, etc.

Let’s be honest here, if you don’t have a budget – or in other words, you don’t have a strategy for where your income is being spent – how are you going to afford your best life, pay down debt, and/or save for retirement?

Here’s a hint:  You won’t be able to.

See, if you do not have a budget, you do not really know exactly how much money you make and spend each month – meaning you can’t really say that you spend your money in the most responsible and efficient way possible.

And, if you don’t have a budget, you probably don’t have a very good system in place to pay down your debt or save for important things.

So, you’re guilty of not having a budget.

But, not for long.  For let me introduce to you how to make a budget that is customized to YOU and will work without ever failing to give you a life free of financial stress.

2.  How to make a budget (that never fails)

Creating a budget that is customized to your financial needs + ensures your financial success month after month is actually pretty easy.

You’ll need to do some simple math but otherwise, all the resources you need to create and maintain your perfect budget can be found in our Budget Boss Financial Planner.

Let me break how to make a budget down quickly and then we can dive into deeper deets in a minute!

PART 1:  Understanding your income

PART 2:  Understanding your expenses

PART 3:  Computing your budget

PART 4:  Automating your budget

Trust me, I’ve been using this budget for the past five years and I have never missed a bill payment, have never been short for a bill, have paid back over $10,000 in debt, and began to save for retirement.

This budget is a good example of a percent based budget, but will be customized directly to your financial needs, which is how it becomes fool-proof.


So, before you can make a budget for your income so you can live your best life, you gotta understand your income.

To understand your income, grab copies of your four most recent paychecks + your financial planner and follow these steps (here comes your basic math skills):

1.  Total your four most recent paystubs AFTER taxes (403 + 565 + 397 + 486 = 1851)

2.  Divide your total from #1 by 4 (1851 divided by 4 = 462.75)

3.  Multiply the number from #2 (round up, without change) by 4 (463 x 4 = 1852)

This is an easy way to figure out your average monthly income + if you’re budgeting for your family, obviously include both yours and your spouses income in your total average monthly income.

Your income & expenses worksheet on the first page of your financial planner is a perfect place to organize your income information.

Then, once you know how much money you can expect to see in your bank accounts each month/pay cycle, you can begin to strategically spend your money on your expenses.

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Sweet, now that you know your average monthly income, you can begin tracking your monthly expenses + spending to calculate your average monthly expenses (which you will use to create your perfect budget).

Most people have two categories of expenses + spending:

1. Fixed Expenses

2. Variable Expenses + Spending

Fixed expenses are expenses the bills that you are required to pay monthly, such as rent/mortgage, utilities, cell phone, credit cards, insurance, etc.

Variable expenses are expenses that vary in cost each month and could be decreased in cost if necessary, such as things like groceries, gas, entertainment, clothing, etc.

You can easily organize your fixed + variable expense information on your income & expenses worksheet in your Budget Boss Financial Planner.  I like to use a different income & expenses worksheet for my fixed expenses and for my variable expenses so it is easier to make my budget later.

And, if you aren’t sure exactly what your monthly variable expenses are, you should begin tracking your spending in your financial planner to quickly gain insight into your spending habits.

So, once you’ve listed out all of your monthly expenses and totaled them, you can quickly decipher if you’re living within or above your means.

Simply subtract your total expenses from your total income.

If the number is a positive number, you’re in the green and should be able to afford your lifestyle with ease each month because you earn enough money to cover your expenses. (So, if you’re struggling to pay your bills each month it is because you aren’t budgeting correctly.)

If your number is a negative number, you’re in the red and cannot afford your current lifestyle, meaning you will have to decrease your expenses and spending to stop living paycheck to paycheck.

Now that you know both your average monthly income and your average monthly expenses, you can create your perfect budget.


So, you did some basic math and now you have the two numbers you need to create your perfect budget.

You are going to create your perfect budget using a percent based budget system, however you will be using customized percentages instead of pre-determined percentages such as Dave Ramsey’s.

So, because this budget is meant to be customized to each individuals personal finances, it is best that I tell you how I make my budget so you can model yours after mine while making the necessary modifications for your life.

The steps you should use to determine your percent based budget:

Step 1:  Divide total monthly fixed expenses by total monthly income for fixed expense percentage

Step 2:  Divide total monthly variable expenses by total monthly income for variable expense percentage

Step 3:  Divvy up the remaining percent’s out of 100 to allocated spending/saving that fit YOUR needs

Doing this ensures that you have enough money for your monthly expenses first (removing the stress of affording your life) and for your less important spending/saving, second.

For example:

  • Fixed Expenses Percent – $2,500 divided by $5,000 = 50%
  • Variable Expenses Percent – $1,000 divided by $5,000 = 20%
  • Remaining Percent of Income (YOU decide what is best to do with this income, i.e., pay off debt, save, spend, etc) – 30%

See, once you have percent’s for each category of your budget, you can automate your budget so you literally never have to budget again (well, maybe like once a month).

3.  How to automate your budget

Ok, we’ve finally made it to the best part of how to make a budget that will never fail…like never, ever, ever fail. (Unless you quit sticking to your budget!)

Your fourth and the most important step on your budgeting journey is to automate your budget using specified bank accounts, direct deposit, and automatic bill pay.  Here’s how:

1.  Locate your Bank Accounts worksheet in your Budget Boss Financial Planner

2.  List out all of your bank accounts (such as one for fixed expenses, one for variable spending, one for saving, etc.)

3.  Assign each of your bank accounts a percent that you figured out when you created your perfect budget

(a) fixed expenses bank account = 50%

(b) variable spending bank account = 20%

(c) savings account = 30%

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4.  Add your bank accounts to your direct deposit information with your employer to have them directly deposit your percents out of each paycheck into your various accounts (for example, you would directly deposit 50% of every paycheck into your fixed expense account, 20% of every paycheck into your variable spending account, and 30% into your savings account.)

5.  Set up your fixed expenses (bills) to be automatically withdrawn from your fixed expenses bank account which should (if you’ve kept to your budget) ALWAYS have the exact amount of money in it to cover your expenses.  (You’ll also avoid missing due dates and paying late fees)

Taking this extra step to automate your budget means that you almost never need to actually budget.  And, your customized percent based budget means that you’ll never have to live paycheck to paycheck again.

Pretty sweet, right?

Creating a percent based budget that is customized to your finances + then automating your budget will get rid of all your money stress.

Using your financial planner, you can organize your income and expenses, begin to track your spending, and can organize your automation information.

This budget transformed my families life and I can’t wait for it to do the same for you.

Cheers to budgeting as little as possible while still being financially successful!

What budget system do you use?  Are you going to give my customized percent based budget a try?  Comment below!

The Budget Boss Financial Planner

Happy Budgeting!

xx Michelle


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