5 Simple Steps to Creating An Empowering Personal Budget đź’µ

Updated: Feb 7

By Matthew Collings

Creating a simple budget
Simple Budget

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Creating An Empowering Budget đź’µ

You’ve heard people talk about “budgeting.” You have even probably thought about having one. But the idea of living life on a budget carries a lot of anxiety along with it.

The truth is, just about anybody can create a budget. The real struggle, though, is sticking to it. Most people who start a budget will adhere to it for a month or two. But then comes life: birthdays, holidays, the last minute trip, and countless other unexpected expenses. And before you know it, it's a bye-bye budget.

From my past financial mistakes, I’ve learned that a budget is key to transitioning from broke to accumulating wealth. I used to view a budget as restrictive, boring, and negatively life-altering. However, as I reluctantly began to live life on a budget, I learned that it’s quite the opposite. When we tell our money where it needs to go, it's surprisingly quite freeing. Most importantly, it empowers you to truly do the things you want to do with your money.

Building an empowering budget can change the course of your financial future.

So let’s go! I’ll show you the five simple steps I took to create an empowering budget for our family!


To create a budget that empowers you to do the things you want to do with money, you have to set designated time aside to look at your finances intentionally.

Now, if you are in significant debt or financial trouble like we once were, this can be very challenging. In my book, Negative Net Worth, I shared how I almost had a panic attack every time I sat down to look at our finances. But the truth is, if you want to empower yourself to win with money, you have to commit time to create a budget, regardless of how dire your financial circumstances are.

Most people who live on a budget create them for an entire month. However, each person or family’s unique circumstances play a significant part in deciding if a weekly, bi-weekly, or monthly budget works best for them. We create a monthly budget as it works best with our monthly expenses and pay schedule.

Here are the five basic steps we follow to create an empowering monthly budget:

Step 1 - Gather All Of Your Monthly Income

The first step is to gather the totals of all of your monthly income. This is all of the money you take home from work, also known as your net income. Be sure you don’t count things like deductions for insurance, savings, child support, or anything else that comes out of your check.

Starting with this step allows you to see the total amount you have available to spend for the month. This is key because in order to build wealth, you have to spend less than you make each month.

According to a recent Pew study, only 46% of Americans said they spend less than they make each month. That means that more than half of America is spending more money each month than they net. That’s insane! But it’s because they don’t have a budget!

If you have a side hustle, my personal opinion is this money should NOT be included in your monthly budget. I recommend funneling side hustle money to paying off debt, savings, or investments.

Step 2 - Tithe 10%

The next step to building an empowering personal budget is to tithe 10% of your income before anything else. Say what? Look, if you have read my book, then you will know that my financial views fall unapologetically in-line with the Bible.

The truth is, all money ultimately belongs to God (Psalm 24:1). He gives, and He takes away. Therefore, as believers, we are called to bring the first 10% of our income to God.

Tithing is a tough one for me. It takes faith to step out in obedience in this area of our lives. The truth is we tithe because it's an outward expression of our faith and trust in God to provide. It’s us saying our hope is in the Lord and not in our bank accounts, job, or anything else this world has to offer.

We don’t tithe for God to bless our money. We do it because it's an honor and a blessing to walk in obedience to what the Lord has called us to do. However, I will admit that any month we don’t tithe is the toughest for us financially. There is just something about walking in obedience to the Lord that brings about a supernatural peace in our lives

When we don't start our monthly budget with this step, we are essentially saying we are a better money manager than God.

I struggle with the idea of tithing when I start to see all of the monthly expenses. That's why I suggest tithing first before moving to step 3. And let me just say for the record, there have been months it has been VERY tight. But God has always been faithful! And tithing is the one area He says we can test Him (Mal. 3:10-12).

Step 3 - Figure Out Your Monthly Expenses

Next, create a very detailed and thorough expenditure chart to analyze your monthly expenses. Every single bill or payment you have each month needs to be included. I would suggest looking back over the past three to six months and compiling an average amount for each expense.

There are several apps, like Mint, which help to track your monthly expenses by simply looking through your linked bank accounts.

I suggest putting your monthly expenses into the following three categories:

  1. Fixed Expenses cover all the things like rent or mortgage, utilities that don’t fluctuate, cell phone bills, insurance, and everything else with the same monthly payment every month.

  2. Variable Expenses are everything else that fluctuates from month to month in both price and frequency. These expenses could include gas, groceries, credit cards, birthday parties, holidays, trips to Target, coffee, and more.

Next, you have to work to trim the fat. When you have a budget, you realize you don’t make as much as you think you do each month. You can choose to trim the fat in both categories. However, the variable expenses is probably the easiest starting point for getting rid of excess spending.

When we first started our budget, my wife found I was spending $125 a week eating out! That fat had to go. Look for areas where you are blowing money and get rid of it.

Here’s some additional truth. If you are reading this and are already tight and there is no fat to cut, you will need to take a long hard look at your lifestyle.

You may need to look at downsizing your home or car, cutting out excess spending, cutting the premiere TV streaming apps, and selling things in your home.

For us, we sold our home and used the proceeds to pay off debt. That may not work for you, but that's not my point. The point I am trying to make is that you have to find what works for you and do it!

Step 4 - Create Your Zero Dollar Budget

Creating a budget puts you in control and empowers you to do the things you want by reducing your monthly expenses and paying down debt; you only further your empowerment.

The majority of people work to live and live to work. That is not how we were intended to live! Without a monthly budget, we will spend, spend, spend! You have to have a budget to live the life you desire.

Without a spending plan, we won’t be able to save for retirement, college, or anything else. There will be very little additional money for investing. There will likely be no emergency fund. And our debt will only continue to climb.

There are several types of budgets out there. However, after struggling to stick to a budget over the years, I have found that the zero dollar budget works best for us. I’ve included a link to one of our original resources at The Money Rant, available for immediate download for FREE!

A zero-dollar budget gives all of your net-income a home. It all has a place to go. There shouldn’t be a single dollar left at the end of the month that isn’t assigned a purpose. In doing this, you avoid meaningless spending and think twice before swiping your card at the store.

This budget can be very restrictive in the beginning, but as you move forward, it is very rewarding to see it at work.


It won’t work the first, second, or third month perfectly. And maybe beyond that! But this brings us to the most crucial step in the process of creating an empowering budget.

Step 5- Have Grace With Yourself

You have to extend yourself grace. Budgeting isn’t going to work each month perfectly. If you are married, you and your spouse have to work together on this!

My wife and I always say we aren’t where we want to be, but we aren’t where we once were!

It’s important to understand that budgeting isn’t a “one and done” activity. It takes lots of patience, flexibility, and grace to make it work. You may have to revisit your budget several times during the month and adjust as needed. You may completely blow it one month.

That's ok! Just keep moving forward!

As you learn to budget better, you may find that you need to cut different things out of your monthly budget, like gym memberships or anything else with flexibility each month.

You may also find that at some point in time, your financial priorities shift. Maybe your job stability becomes a concern, so you have to focus on saving instead of paying off debt. Or perhaps you are one year into your budget and losing motivation, so you save to reward yourself with a small trip to keep that motivation going.

That's ok too! Just keep moving forward!

Final Thoughts

At The Money Rant, we’re all about getting out of debt, saving money, and building wealth. Having a budget isn’t a burden. Having a budget is empowering!

If you are struggling each month, just know we get it! But the truth is you have to start a budget, NOW!

Starting a monthly budget will be hard at first, for sure! But just like anything in life worth having, it takes hard work, dedication, and perseverance. Start thinking long term instead of right now, and learn the power of telling yourself “NO”!

I promise it's worth it in the end. There is empowerment in financial freedom!

Want to learn even MORE?

Visit www.themoneyrant.com and subscribe to our blog, so you receive future notifications! Also, check out the author's #1 book in personal finance on Amazon, Negative Net Worth: Hard-knock life lessons in finances and the path to changing your financial future. Available in paperback and on Kindle. Finally, don’t forget to visit our e-marketplace to check out some of our favorite wealth-building resources as well!

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