Baby Step 2: Setting up a Budget

Our family has taken a long journey to turning our lives around. We started out over-weight, out of shape, desperately in debt, stressed out and disconnected. Can you relate? How is your family doing right now?

Do you have enough money to meet all your financial obligations or are you struggling to put food on the table?

Are you energetic and feeling great? Are your kids active and thriving? Or are you lethargic, prone to illness and over weight?

Are you and your family interested in one another or do you barely ever speak?

If you’re not feeling too great about your answers, let me tell you, our family wasn’t doing very well either. It hurts my heart when I look back at where we started from. We set out to change our lives… and we did! It can happen!

Have faith and keep reading because I’m going to tell you the second step we took towards a healthier, more balanced lifestyle.

Photo from

Photo from

In Baby Step 1 we discussed getting organized and paying off debt. As you step off with baby step one, baby step two is the accompanying arm swing that gives you forward momentum. It’s a complementary action that will help you get your money to work for you instead of against you.

Just as you organized your debts, it’s now time to organize your money. This process is decidedly more complicated and isn’t nearly as cut-and-dry as organizing your stack of bills. But it is just as necessary! You and your spouse will have to tackle this one together. This really isn’t a one-person job, unless of course you don’t have a spouse. If you’re single, don’t worry, you’ll be able to handle this on your own. But when there are two people using the household income, you both need to be in on the decisions made during this process.

As a side note: if you’re married – you should combine your incomes. The notion of “what’s mine is mine and what’s yours is yours” is ridiculous if you’ve committed to living life “TOGETHER.” Bite the bullet and make the commitment to combine your accounts.


  1. Get a calendar. My husband and I use Google calendar. You can use paper or electronic, but make sure you and your spouse (if this is the case) can both have access to it.
  2. Write down your pay days. (If you have irregular pay, that will be discussed in a separate article.)
  3. Write down the due dates of each of the following bills: rent/mortgage, rental or mortgage insurance, electricity, water, gas, phone, trash, cable, car payment, car insurance, health insurance, life insurance. Caveat: if you have some of these coming out of your paycheck, there is no need to clutter your calendar with their due dates. Side note: get rid of your cable. You’ll save hundreds of dollars!

After you’ve written down the due dates for each of these bills you’ll have NO EXCUSE to miss them! These bills are almost always due on the exact same date each month. They will typically vary only by one or two days.

No excuses! Got it? QUIT CLAIMING IGNORANCE and start taking responsibility for your money and your life. 


AVERAGE YOUR BILLS so you can be ready ahead of time to pay them. Here’s an example:

The water bill. Call the water department or look at your account online and write down the last six payments you’ve made. Add them all together. Divide the sum by six. There you have your average cost for water.

54 + 59 + 89 + 44 + 50 + 54 = 350

350 / 6 = $58 average monthly cost

WRITE THAT AMOUNT ON THE CALENDAR on the water bill due date. Now you know about how much money you’ll need to have to cover that bill in the coming months. Some months you’ll owe a little more, some you’ll owe a little less. But now you’re prepared!

Do that for all of your monthly bills.

This is a very important step. You need to PAY THESE BILLS BEFORE YOU PAY YOUR DEBTS.

I can tell you from experience that there were times when my husband and I didn’t have much left over after these bills were paid. Whatever we did have left over was for food and gas for the car. Sometimes, I only had enough gas to get to the grocery store and back, and not a penny went to our debts. The debt collectors may get nasty – but they’re paid to be that way. Just tell them they will get their money when you can afford to give it to them.

I won’t lie and tell you you’ll be “living the dream.” It will be hard. But you can’t allow yourself to cave in to materialistic, worldly wants. ANYTHING YOU CAN BUY OFF A STORE SHELF CAN WASH AWAY. It can burn up and be gone in the blink of an eye. I promise you – that big screen television you covet isn’t going to mean anything to you in three years. The $500 dress you just HAD TO HAVE probably won’t even fit after the holidays. The shoes that line your closet aren’t going to last another season much less carry you into your old age!

WHAT REALLY MATTERS are the people in your life! The RELATIONSHIPS you have with your loved ones, the relationship you have with your God…those are what matter and they are the only things that will sustain you through life.

Now, go get yourself a calendar! Do this assignment and LET ME KNOW HOW IT’S WORKING OUT FOR YOU! If you have any questions, please share them. The only silly question is the one that goes un-asked. Be brave. Your question may be on the minds of others and will certainly lead to better clarity for all.

Just as a side note: my husband and I really love our Google calendar. You can set up alerts to remind you of upcoming events and we can have separate calendars but share our events. It’s very useful. Here’s a link so you can learn a bit more about it