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Real Life On A Budget

How to Budget in the New Year

The ball drops. The lights flash. The fireworks explode. “Auld Lang Syne” plays. When all those things happen at once, it can only mean one thing: New Year’s!

We all love a good New Year’s celebration, but with it comes the reminder of goals, responsibilities and resolutions for the upcoming year. And if you’re like most people, somewhere in the middle of all your resolutions is money—as in, the desire to manage it better.

If any of your resolutions for 2015 involve money, then your success will start with a budget. I know: The dreaded “B” word. Sure, creating a budget and cash flow plan doesn’t really sound like much fun. But doesn’t it sound more fun to go on a vacation with your friends or family and come home without worrying about credit card bills and debt?

That’s what you can do when you make a plan for your money—one that involves dumping debt, cutting up credit cards, and living debt free. You’ll give up on your resolution much more quickly if you don’t have it written down.

So how do you start? First, figure out how much money you have to work with for the upcoming monthbefore the beginning of each month. This includes your income, your spouses income and any extra income you all may have.

Spend every dollar on paper, on purpose, before the month begins. Give every dollar a name. This is called a zero-based budget, and it works. Basically, when you’re planning for the month ahead, you should be able to subtract your expenses (outgo) from your income to equal zero. When you’re done writing the budget, you shouldn’t have anything left over. Related: Let’s Break Down a Monthly Budget.

A good plan lives and changes as your life changes. You’ll need to review your budget each month throughout the year to make adjustments. If you budgeted too little in one area, then adjust. If you budgeted too much in another area, then adjust.

If you’ve been living without a budget, it will probably take you a few months to get the hang of it, and that’s okay. But in a few months, you should have a budget you can rely on.

A budget isn’t about complicating your life. It’s about knowing where your cash is going and making your life a whole lot easier. Just imagine how great would it feel to be debt-free and in charge of your finances in 2015. Sounds like a happy new year to me!

I want to hear from you! What are your top money goals for 2015? 


  • Khook

    I do a couple zero based spending charts. One is long term while year kind of thing then I break things down by 4 month plan. And then of course it’s tweeted monthly. I just find it nice to see the whole plan laid out. I have a way to go but I have come so far! But it took me time to get in that place it will take me some time to get out. I thank God that I was given the opportunity to go thru a Dave Ramsey course. I dream of the day I can come and scream on the show! My favorite is the girl who surprised her daddy with her debt payoff. It’s how I imagine Gods face when I am able to pay everything off and be able to help others around me for His good. I’m not perfect and I slip up but I just get back on it.

  • southv

    How do you do a budget based on hourly wages?

    • Brittany

      I assume a horrible week and then use the “Irregular Income Planning” form for any extra income beyond what I budgeted.

  • jlee

    why does the budget have to be $0? why can’t there be anything leftover (to put into savings or towards a debt at the end of that pay period)? just curious!

    • Adam

      I believe that is part of “giving your money a name”. X goes to paying off that debt, z goes to that bill, etc. That is just my understanding/what makes sense to me 🙂

  • Joy Cochran

    This is the first year that I will be doing a zero-based budget. Thank you for the tips!

  • This is great, I think the concept of zero-based budgeting would fit me well. I like to know that my money is being maximized. My biggest goals this year are to eliminate credit card debt, than student loans and go from there. The hardest part for me is eliminating guilt on spending outside of debt, even justified expenses. I think this would be really helpful and allow me to factor in the “fun” side of things so that I can accomplish goals and not breathe down my own neck! the only problem is adjusting my budget with certain utilities as there has not been any consistency… thanks for the article!

    • Jen

      To help with the utility bill issues, I estimate what my highest bill could be for that time of the year and divide by two (my husband gets 2 paychecks a month). When the bill arrives I already have the money to pay it. If it’s lower just leave it in the utility catagory for maybe a bigger bill. It has worked wonderfully for all my utility bills!

  • Becky Price

    just got the Dave Ramsey kit for Christmas can’t wait to get started and finally have me and my husband on the same page

  • Steph

    We have no credit cards…yay…but two extremely high interest rate loans and we are barely making it paycheck to paycheck. I wish it could work for us too.

    • Tyler S Hardy

      Why can’t it? When you’re in debt, the baby steps and the budget are the best thing to work your way out!

  • Brittney Frey

    My in-laws paid for my husband and I to attend a financial peace class offered at our church and our lives are forever changed. In a matter of 8 weeks we had paid off over $2000 in debt, had a small emergency fund and were paying our bills ahead of time. We were living pay check to pay check only because we weren’t telling our money where to go. It took some effort to start with but once you get the hang of it, it is so easy. We have paid off and cut up all of our credit cards, paid off all of our outstanding medical bills from having our son prematurely, and are now hitting the student loans. We aren’t making any more money than we had been but are happier now than we ever before. There is hope to be out from under the dark money cloud and be able to live life like we have always dreamed. We still have a ways to go but we are getting there, one dollar at a time! Our 2015 goal is to cut our student loan debt by 30% and have two “newer” cars without loans. I never thought it would be possible to pay the debt off so quickly, but when you know where you are spending your money, you can spend it wisely! Here’s to a GREAT 20105!

  • knocking out our debt in 2015

    THE INFORMATION: nIf I have 10K on three credit cards – Card 1 = 6500 / 29.99% APR Card 2 = 2500 / 15% APR Card 3 = 1000 / APR 9% – I have 5,000 to put towards credit card debt.nnTHE QUESTION:nShouldn’t I pay down the 6500 with the highest rate first and then hit the smaller cards that I am not paying as large of a monthly fee to carry? nnThanks

    • teemee234

      TO feel the joy of paying off debt faster, you’ll want to pay off the smaller amounts first, to get the ‘gotcha’ feeling going. What you have is a 29.99% APR, thats and ANNUAL interest amount, not a monthly amount, so you won’t be racking up 30% each month. HTH!

    • Joy

      My understanding is to build momentum then pay off the 2 smallest ones. Then put the rest towards the largest one. Then you’ll have the momentum of having paid off the 2 smallest ones, and put all extra towards paying off that last large one. It’s not so much about the numbers (because of course then it would make sense to hit the largest one first) but it’s about behavior and knowing you’re making progress and also the feeling of not having to pay the 2 smallest credit cards anymore will be amazing. Way to go!

    • JBH

      I would transfer those cards immediately to cards offering 0% APR for 12-15 months, then work on paying off the highest one first OR the one whose 0% APR ends first. That’s the only way we’ve been able to pay things down. You will have to pay a balance transfer fee, but you can find one that’s 2% or 3%. You may even get lucky and find a 0% balance transfer fee, but those are rare. Good luck!

    • knocking out our debt

      Thank you all for the comments!

  • Lyndsey

    Top money goal for 2015: finally pay off all our student debt! We have been attacking it with gazelle like intensity the last few years since we went to FPU, and have managed to pay off a huge chunk just in this last year! We have $6000 more to go (originally $40,000). It’s a big hurdle, but we have made so much momentum this last year, we are excited! On top of that, we really do want to have a working 0-based budget. Great article!

  • Cathy Rho

    My Husband and I attending the program at church. Love it!!!

  • Kay

    We will pay off the rest of our debt in the first half of 2015 — for good this time because we finally followed Dave’s advice & got rid of our credit cards! In the second half we will build up our emergency fund. SO excited!

  • Kevin Smith

    We have been working on our house fund for over a year now but we have yet to hit our monthly goal consistently. My goal is to consistently git that goal every month on top of starting a car fund. n

  • Ashley

    I am so excited to start the year 2015! In 2014 I made it my main focus to keep track of my expenses and was able to pay off an extra $7500 in student loans(my only debt!). I hope to double that next year! In 2015 I am also beginning the zero-based budget, which will really become a challenge for me since I have not ever really followed a budget before. You have really inspired me to really focus and accomplish my goal of creating and sticking to a budget.

  • LadyHawke

    I would like to understand how I can get rid of a huge student loan that I can not possibly pay. Without going into the details here, suffice it to say, I do not make enough money to live from month to month let alone pay a student load that has been hanging around for 24 years. Got any ideas? Give me a private email address that I can email you if you do.

  • Christie

    I do like the idea and have created a zero based budget but inevitably something comes up that was not expected. Either my categories are too restrictive or I don’t have enough categories. Do I factor in a category for unexpected expenses and let it build; perhaps if it gets to a point then take any excess after that would apply toward debt or future goals?

  • Brian Davies

    For sure I am not that good at all about budgeting. I have been extremely lucky about a lot of stuff in that I currently have no loans nor credit card debt. But on the flip side I have a only a part-time job trying to afford more school to get my bachelors degree. Been doing community college party-time knocking off as many of the low-level classes towards my degree as I can. Also because of low income I don’t have a place of my own yet, and considering my age I know am “way behind the curve.” Am seriously looking at moving out of state, especially if am able to get hired for any of the desired jobs I am looking at.

  • Shawn Grieff

    There are 7 kids in this family, our grocery bill, is normally about the same as the house payment. How is that dealt with?

    • Auntie B Preece

      Just like many of the other recommendations your families food is budgeted each week with the use of planning a menu. I have 10 children and a very small food budget. We eat 99% our meals at home from scratch. Yes it takes time but it really takes planning and organization.

  • Lisa Barnard Findley

    Starting this month! Anxious to get started. Tired of stressing all the time!