There is a word that makes me shudder every time I hear it. It can cause agony and fights at its mere utterance. It’s been used to justify poor behavior – either utmost control or total chaos. Just mentioning it can cause nausea, tension headaches, muscle pain, and irritable behavior.

What word am I talking about??

I’m talking about the B word.


Yes, the word budget often has a strong negative connotation with words like restraint, control and “no”. Most people avoid creating a budget because they think it’s too much work, it’s too complicated, or they don’t want to face the reality of their financial situation. The truth is that when you create a plan for your money – a spending plan – you get to be in the driver’s seat of your money. Think of it as a blueprint, a road map, a game plan of how you get to spend your money each month and, in turn, allows you to set and execute your financial goals – goals that will feel attainable once you know where your money is going.

Creating a spending plan means giving yourself the power to tell your money where to go. It’s being proactive with your money. Rather than letting your income seep out of your account haphazardly, you get to decide ahead of time what your money is spent on. Otherwise, if you don’t tell your money where to go, it will find its way to places you don’t want! You get to decide what you value and prioritize in your life by deciding how to spend your money. Isn’t that an empowering way to look at your money??

Creating a spending plan can feel very overwhelming so here are some things to keep in mind as you get started:

Just start with one month. Planning one month of your expenses should cover what you will encounter in your budget throughout the year. Give yourself enough time to review your bank account and credit cards (if you use them) to determine what expenses need to be captured for the month. Remember that your first spending plan is not going to be perfect. In fact, it may take you a few months to get your spending plan in a good place. Pack your patience when you sit down to write out your first spending plan. It’s OK if it’s not perfect the first time around!

Give every dollar a name. Your spending plan should allocate every dollar that is coming into your bank account with a purpose. That purpose can be expenses, savings, investments – however you see fit to spend your money. By naming every dollar of your income and giving it a job, you lower the risk of those dollars slipping through the cracks. Scared that you may be off a few dollars here and there with what you are planning to spend? I created a category on my spending plan called Buffer. It’s usually no more than $20-$30 to cover any dollar rounding issues or a small expense that may fall through the cracks (It happens!).

What about planning for an irregular income? There are some people who work on commission or have variable hours that they work and therefore, their monthly income can vary. The key to creating a spending plan with variable income is to base it on the minimum amount you bring home each month. Then you can assign the amount over and above that minimum to other categories (there will be a future in-depth blog post about this topic).

Finally, a spending plan is worthless if you don’t carry it out. You need to execute the spending plan in order to reach your other financial goals. Once you begin carrying out your spending plan, you may find yourself addressing former spending behaviors, like not spending as much time going to get coffee or making different purchasing decisions about a new dress or pair of shoes.  Your spending plan can be a wonderful catalyst to help you make those changes.

So, are you feeling overwhelmed about how to create a spending plan? Well, I have some amazing tools to help you get started. Along with the information in this blog post, I am offering you a free gift – a Spending Plan Bundle. In this bundle you will find a Spending Plan Template (in Excel and PDF) and well as 7 tips to help you get started creating your spending plan (You may see the dirty word “budget” in these files – my apologies in advance!). Click here to sign up to get these free gifts and get started on your spending plan today!