“I don’t make enough money to have a budget.” Not only is this mindset going to constantly keep you in a financial rut, but it’s simply not true. One of the biggest money mistakes you can make is not following a budget.

In fact, if you feel like you don’t make enough money or you’re struggling to make ends meet, having a budget is especially important for you.

A budget is simply a plan for your money. It’s a safeguard against credit disasters, missed payments and other avoidable money mishaps. It can also be one of the hardest things to do when you’re living paycheck-to-paycheck and always feel broke.

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Assess Your Financial Situation

Creating a successful budget first requires you to be honest with yourself about your financial situation. It will be impossible for you to create an effective plan for your money if you’re not completely aware of what’s going on with it.

Facing the reality of your finances may be something that makes you uncomfortable, but it’s necessary to create a plan that’s going to stick.

Take a look at how much you’re bringing it and how much you’re spending. Does your income exceed your expenses? Are you bringing in enough money to pay your bills?

The truth may not always be pretty, but it’s absolutely crucial to be honest with yourself about what’s really going on with your money.

  • Calculate your total monthly income from all sources. If you have a side hustle or some other additional form of income, make sure you include that, too.
  • Write out all of your expenses with exact amounts for each. This includes everything you pay on a monthly basis from your rent and utilities to your Hulu subscription and dog grooming fees.
  • Subtract your expenses from your income. The final number may not leave you with a good feeling, but again, being full aware of what you’re dealing with is crucial to your financial freedom and success.

Prioritize Your Spending

Now that you have a good understanding of your financial situation, it’s time to prioritize your spending. First, make three columns for the three B’s: Basics, Bills, and Bonuses. These are going to be the categories in which you’re going to separate your finances.

  • Basics – basic needs (ex: rent, groceries, gas/electricity, etc.)
  • Bills – bills that aren’t absolutely necessary, but are still important (ex: credit cards, phone bill, internet, etc.)
  • Bonuses – discretionary expenses or “extras” (ex: Netflix, gym memberships, eating out, etc.)

After you’ve made your columns, fill in all of your expenses (they should already be written down) listing each one in the appropriate column.

Again, it’s important to be honest with yourself. Your monthly Netflix subscription should not be in the “Basics” column just because you need to binge Grey Anatomy. What do you absolutely need and what could you truly do without?

The purpose of the three categories is for you to have a visual understanding of what is most important and takes priority when it comes to distributing your money.

If you’re having a difficult month, you’ll be able to work your way through your budget and ensure that if nothing else, your basics are paid.

Of course, the goal is to have both basics and bills paid and ideally, the bonuses as well, but as we know, things don’t always go according to plan. Life happens. You’re not responsible for things outside of your control, but you are responsible for planning for them.

[bctt tweet=”You’re not responsible for things outside of your control, but you are responsible for planning for them.” username=”bdgtsandbalance”]

Cut Back Your Expenses

When you find yourself coming up short financially, you have only two options: make more or spend less. That’s it.

The only way to improve your financial situation is to increase the amount of money you’re bringing in or decrease the amount of money going out.

Either one will free up some cash to help you get out of the current hole you’re in, but cutting back on some of your expenses is something you can start doing immediately.

[bctt tweet=”When you find yourself coming up short financially, you have only two options: make more or spend less. That’s it.” username=”bdgtsandbalance”]

Slash the Extras First

Unfortunately, when you’re looking to cut expenses, the first place you’re going to have to look is that Bonuses column.

Of course, we hate cutting back on the things we enjoy, but since these expenses aren’t necessary for you to feed your family and a roof over your head, they’re going to have to get cut back first.

Here are some common discretionary expenses and cheaper or free alternatives:

Expense: Gym membership
Instead try this: 
Workout at home with Youtube videos or free workout websites (Fitness Blender is one of my personal faves!)

Expense: Eating out
Instead try this: 
Pack your lunch instead of buying. Make an oven-ready pizza at home instead of ordering out.

Expense: Cable
Instead try this: Trade the TV for a Firestick and watch your favorite shows and movies on streaming sites such as Netflix, Hulu, and Sling TV.

As you take a look at the expenses you listed in your Bonuses column, think about areas where you can cut back.

Negotiate Your Bills and Payments

Getting behind on your bills isn’t a good feeling. But whether they admit it or not, many people are just a paycheck or an emergency away from being in the same position.

If unforeseen circumstances have come your way, causing you to fall behind on your bills, it’s not the end of the world. Here are some tips to help you get back on track:

  • Decrease other expenses. Hopefully, you were already able to successfully identify some ways to cut back on some of your discretionary expenses. This step alone already frees up some money for you to put towards unpaid bills.
  • Talk to the companies. Many companies are willing to work with you, you just have to ask! Both credit card and utility companies typically offer reasonable payment plans to help you get on track with your payments.
  • Apply for an income-driven student loan repayment plan. If you are not able to make your student loan payments or the amount is a significant part of your income, you may want to ask about an income-driven repayment plan to lower your payments.
  • Ask the credit card company for a lower interest rate. As long as you have a positive credit history, it is not uncommon for credit card companies to approve a request for an interest rate reduction.

Bring in More Money

  • Start a side hustle. Starting a side hustle is a great way to bring in some extra money on the side without quitting your primary job or necessarily taking on the commitment of a second, part-time job. Starting a blog is a great option for a side hustle that could grow into a full-time business.
  • Ask for a raise. A closed mouth won’t get fed! If you’ve been at your job for a while and you have an excellent performance history, consider asking your supervisor for a raise. After all, the worst you can be told is no!

More Budgeting Tips

  • Have a little fun! Make some room in your budget for fun and entertainment, even if it’s not a lot. Being so tight with your money can get exhausted after some time and you’ll go crazy if you don’t let loose and treat yourself every once in a while. Just like every other expense, budget a reasonable amount of “fun money” for yourself and stick to it!
  • Write it out. Whether it’s an Excel spreadsheet or old school pencil and paper, your budget must be written down somewhere. If not, it will be impossible to keep track of all these numbers floating around and stay on track. Using whichever method is right for you, make sure that you have a visual budget to refer to at all times.
  • Review your budget often and make adjustments when needed. One of the biggest tips for budgeting success is to constantly review it. Make sure you are on track and if you aren’t, ask yourself why. If you’re finding that you’re constantly going over your gas budget and you’ve cut back in every area you can, maybe you need to allocate more money to that expense each month. Having a budget only works if you follow it. If the money is going to be spent, not budgeting for it will only set you back.


Making a budget that you can actually stick to isn’t always easy, especially when you feel like you can never get ahead. Being broke is never fun and adding what feels like more restrictions to your money probably won’t make you feel any better. However, if you adopt the mindset that a budget is simply a plan to keep you on track, you’ll realize that these temporary sacrifices are only setting you up for much greater financial successes in the future.