The number one successful tool for getting out of debt is setting a budget and sticking to it.  I didn’t use a budget a for the first few years of my married life and what a mistake that was.

So how do you set up a budget?  I am going to show you a simple way that will work for anyone.

Step 1

Make a list of all your expenses. I like my life simplified, so I tend to group some of my categories together.  You can be as detailed as you like.  I lump all my utilities into one category.  Anything that has to do with my car I put into auto; oil changes, gasoline, car repairs, registrations.








Cell phone




Mad Money


Home Repair


Step 2

Once all your categories are listed you have to associate an dollar amount with them.  How much do I typically spend? The easiest way I have found to break this up is based on how many times you are paid a month.  So for instance lets take Mortgage and say you pay 1500 a month, we’ll just say that your taxes are rolled into the payment.  Then I’ll look at how I am paid.  My husband gets paid weekly, so my budget is set up weekly.  How do you do that with a monthly payment?  I take 1500 (my mortgage amount) and multiple it by 12 months of the year. (1500 x 12)  My total comes to 18,000.  I then take 18,000 and divide it by 52 (the # of weeks in a year).  This gives me a total of $346.15. So that is the amount of my paycheck that I need to put aside each week for my mortgage.

If you get paid twice a month, you take the 18,000 and divide it by 24.  So you would need to put aside $750 each month.  Then you would do this with every category.  It takes a little bit of time, but typically once you set up a budget it will last you a while.

So let’s punch in some numbers.  I am going to go with a weekly budget, since that is what I am used to.

Mortgage                 $346.15

Utilities                    $60.00

Insurance                 $75.00    (this includes Life, home, and car)

Groceries                  $150.00

Auto                         $70.00

Clothing                   $20.00

Cell phone               $25.00

Cable                       $20.00

Entertainment        $50.00

Savings                   $50.00

Mad Money           $40.00

Miscellaneous        $25.00

Home Repair         $ 30.00

Charity                   $200.00

TOTAL                   $1161.15

Step 3

Take a look at your budget.  Every penny you make should be budgeted somewhere.  Savings is a great place to put anything extra.  Make sure you give yourself a little breathing room in your budget.  Unexpected expenses occur all the time.  Sometimes even new categories arise, such as a child needing braces.

At this point, after you have made you budget, and totaled it up you need to see if it matches you pay check.  This is the amount you receive after taxes, medical, 401k and anything else that gets deducted from your gross amount.

It your total is more than you make than you have a problem and need to make some cuts in your budget.  If your total is less than you make great! But you need to make some changes.  Put more in savings or bump up categories that may be a little tight.  You want you total to equal your take home amount.

Step 4

The next to steps are the most important steps in ensuring that you have a successful budget.

Make sure if you are married or if there is another person that spends money and has access to these funds, that you are both on the same page with the budget.  If you aren’t and one person sticks to the budget while the other one doesn’t…well.  It will fail.

Step 5


Don’t make allowances.  Just because the new iPhone 27 came out, that doesn’t mean you need it.  If it fits into your budget than get it, but if it doesn’t, you will survive without it.  I am 38 and just got my first smartphone.  It’s an old iPhone I was given for free.  Otherwise I would probably still have my old flip phone.