How to Create a Budget That Actually Works

What if “budget” wasn't a bad word?

Seriously.

What happens inside of you when I say:

“You need a budget.”

Do you immediately think...

Great. Now I can't spend any money.

No eating out.

No shopping.

No fun.

Someone is going to look at my spending and tell me everything I'm doing wrong.

If that's what budgeting means to you, I completely understand why you don't want one.

But that's not what I believe a budget is supposed to do.

A budget isn't there to boss you around.

A budget isn't punishment for spending money.

And a budget definitely isn't about seeing how little money you can possibly spend.

A budget is a spending plan.

It's you sitting down with the money God has placed in your hands and deciding what you want that money to do.

And when you look at budgeting that way, something changes.

Because instead of your budget taking away control...

your budget gives control back to you.

Let’s talk about Why I Believe in Budgeting

Jesus gives an example in Luke 14:28:

“But don't begin until you count the cost. Who would begin construction of a building without first calculating the cost to see if there is enough money to finish it?”

The context of that passage is bigger than budgeting—Jesus is talking about counting the cost of following Him.

But I love the wisdom in the example He uses:

Sit down. Look at what something costs. Know what you have. Make a plan.

That's what we're doing with a budget.

We're not trying to perfectly predict everything that's going to happen this month.

We're deciding:

What has God placed in my hands, what matters in this season, and how do I steward it well?

And I like to make that really simple.

When I look at a spending plan, I want you to think about three things:

GIVE. SAVE. SPEND.

That's it.

Let's start with Give.

GIVE

If generosity is one of your values, give it a place in your plan.

Don't wait until the end of the month and hope there's something left.

Decide what giving looks like for you in this season.

For me, generosity is part of how I want to live my life and part of how I want to steward money.

And we've talked about this in some of my other videos:

I love planned generosity, but I also love creating enough margin for spontaneous generosity.

Your planned giving might be your church or an organization you consistently support.

Then you may also choose to leave a little room so that when someone needs help or you see an opportunity to bless someone, you can respond.

The amount may change in different seasons.

The important part is that if generosity matters to you, your financial plan should reflect that value.

Next:

SAVE

Saving is where we're taking care of both future-you and unexpected-life.

And the first savings goal I recommend is your $2,000 safety fund.

This is where you begin becoming your own backup plan.

The car breaks.

Something in the house stops working.

There's an unexpected expense.

Instead of immediately reaching for the credit card, you have money sitting there specifically for the unexpected.

Once that initial safety fund is established, your savings can begin doing other jobs.

You can save for known expenses.

Christmas.

A vacation.

Insurance premiums.

Home repairs.

A car.

Investing and retirement.

Whatever you know is coming.

And notice what we're doing here:

We're giving future expenses a place in today's plan.

That's important because sometimes something feels like an emergency simply because we didn't plan for it.

Christmas is coming every December.

That's not an emergency.

So saving isn't only about preparing for disaster.

It's about preparing for the life you know you're going to live.

And then we get to the biggest category:

SPEND

This is where I want you to stop being afraid of your budget.

You are allowed to spend your money.

We just want to spend it intentionally.

Start with your needs.

Housing.

Utilities.

Food.

Transportation.

Insurance.

Minimum debt payments.

The things required to keep your household functioning.

Needs get covered first.

Then we can look at wants.

Eating out.

Entertainment.

Shopping.

Subscriptions.

Travel.

The things that make life enjoyable but aren't required to keep the lights on.

And I don't want you to hear me say:

Needs are good. Wants are bad.

No.

I want you to enjoy your money.

I want you to take the vacation.

I want you to go out for dinner.

I want you to buy something simply because you like it.

As long as it fits the plan you've created.

Because this is where budgeting actually creates freedom.

Imagine going out to dinner and knowing:

The mortgage is covered.

The electric bill is covered.

You've put money into savings.

You've given.

You've funded the things that matter.

And there's $100 sitting in your dining-out category.

You don't have to sit at dinner wondering:

Should I really be spending this?

You already made the decision.

You planned for it.

That is why I don't believe budgeting is restrictive.

A good budget gives you permission to spend without the guilt and uncertainty that comes from not knowing whether you can afford it.

And if you're listening to this thinking:

“Okay, Tiffany. This sounds great. But I don't even know where to start because I don't really know where all my money is going.”

That's exactly why I created my 3-Day Money Makeover Challenge.

Because you don't need someone to hand you a restrictive budget and tell you what you're doing wrong.

You need clarity.

You need to understand where you are, what your money is doing, and what needs to change so that your money can start supporting the life you're actually trying to build.

That's what we're going to work on together.

If you're making good money but still wondering why it doesn't seem to do everything you need it to do, join me for the Money Makeover Challenge.

Now there's one category I want you to put in your budget that might surprise you.

You Need a Miscellaneous Category

Yes.

I am literally telling you to budget money for:

“I don't know and the “Mom I forgot to tell you” moments.

Because life does not perfectly fit into categories.

Something will come up.

Your daughter needs something for school.

You forgot somebody's birthday.

There's a fee you weren't expecting.

Something costs more than you thought it would.

And if every unexpected $30 expense destroys your budget...

the problem may not be you. The plan may simply be too rigid.

That's why I like having a miscellaneous category.

It creates some breathing room.

You don't have to know exactly what that money is going to be used for.

Its job is to absorb some of the normal unpredictability of life.

And if you don't use it?

Great.

Move it toward savings, debt, next month's plan, or something else that matters.

Remember:

The budget works for you. You don't work for the budget.

You might be asking “What If My Income Changes Every Month?”

Now, if you have an irregular income, this can feel harder.

I know because I've lived with irregular business income.

And this is where the difference between needs and wants becomes especially important.

Instead of building your lifestyle around your best income month, know what your foundation costs.

What absolutely needs to be covered?

Start there.

When income comes in, cover the priorities first.

Then as additional income comes in, you can fund the wants and additional goals.

This is why knowing your numbers gives you confidence.

You don't have to guess whether you can afford something.

You can look at the plan and know.

I created an entire episode about irregular incomes check out that episode for specifics on irregular incomes.

By the way: Your Budget Is Allowed to Change

This may be one of the most important things I tell you today:

Your budget will be wrong.

At least sometimes.

You thought groceries would be $700 and they're $775.

You underestimated the electric bill.

You forgot about an annual subscription.

Something came up.

That does not mean:

You failed at budgeting.

It means:

You learned something.

So adjust it.

Move money.

Change the category next month.

Look at what happened and use that information to create a better plan.

A budget isn't a test you're trying to get 100% on.

It's a tool you're learning how to use.

And the more you use it, the better you understand your own money.

That's where clarity comes from.

And clarity builds confidence.

So if you've been avoiding budgeting because it feels overwhelming, I want you to make this much simpler.

Start with the money you have coming in.

Then ask:

What do I want to GIVE?

What do I need to SAVE?

What do I need and want to SPEND?

Cover the needs first.

Give the future a place in the plan.

Leave room for the things you enjoy.

Build in a miscellaneous category because you're a human being living an actual life.

And then adjust the plan when life changes.

That's budgeting.

It doesn't have to be scary.

It doesn't have to feel restrictive.

And it doesn't have to be perfect.

Your budget is simply your plan for using your money on purpose.

And when you know where your money is going, you can stop wondering whether you're forgetting something.

You can make decisions with clarity.

You can spend with confidence.

You can prepare for what's coming.

And you can start using your money to create the life you're actually trying to build.

That's financial stewardship.

It's not:

“How little can I spend?”

It's:

“How can I faithfully use what God has placed in my hands?”

And if you're ready to actually do this with your own money instead of just hearing me talk about it, come join me for the Money Makeover Challenge.

Over three days, we're going to get clear about where you are, look at what's keeping you stuck, and start changing the way you think about and handle money so you can move toward greater clarity, confidence and control.

You don't need to have a budget before you come.

You don't need to get organized first.

Start where you are.

The link to join the Money Makeover Challenge is here