Define Your Own Life Timeline

Monthly Budgets – How to Create and Stick To One

How many of you have been creating a monthly budget?  How many of your stick to the monthly budget?  If you’ve answered no to either of these questions look no further.  I’ve developed a full proof way to create a monthly budget and stick to it!  


Creating a monthly budget is actually a simple task, it’s sticking to it that is hard.  Like anything in life, you need to work at it and practice does make perfect.  First and foremost, you need to be realistic with your budget. It will involve a bit of soul searching and debating on what you need and want in life.  We will go over all of that and how to achieve it.  


For me, my annual income has changed over the years and so has my budget. It’s also increased in areas it doesn’t really need to.  Sometimes I feel I had more money at my first job making $28,000 a year then I do today.  The reason for that was because I was truly on a fixed budget with no room for excess.  Making a small amount of money made me think very hard about what I was going to spend that money on.  In the past I would skip buying the new dress so I could afford groceries for the month.  And I ate cereal for an entire month just to afford that adorable Badgley Mishka jacket (that’s out of style now) that I loved. I sacrificed because I knew the value of my dollars and what it took to earn them and spend them.


Back when I made $28K annually,  I also owned a home, a car, and had a decent social life.  How could that be possible you ask.  I was diligent with my money.  It meant not eating out at lunch and getting a  Starbucks only once a week.  It turned into a fun tradition that I still do today called ‘Starbucks Friday.’  I rewarded myself with a Starbucks on Friday for making it through the week.  Sounds silly, but having that venti chai tea latte once a week felt amazing.  While I watched others sip their lattes every day of the week, I knew I was saving $20 a week by enjoying it once a week.  15 years later and I’m still doing Starbucks Friday. Twenty bucks a week for 15 years adds up to about $15,000 and I’m much happier with that money then drinking Starbucks everyday.  


To create my monthly budget I use a an excel spreadsheet.  I first start by writing down what you get paid each month, note if its monthly or bi-weekly.  If its bi-weekly you will actually get paid three times per month twice a year, which is good to know for extra savings.  Once that is completed you will want to work on your monthly budget.  First write down all of your expenses that you have every month and I mean all of them.  Yes there are the essentials like mortgage (or rent), car payment, groceries, utilities, cell phone, but you also need to include things like clothes, eating out, and Starbucks, because it all adds up.  You should also include savings because you have to save money no matter what you make. Even if it’s just $50 a month you need to save money.  

Once you get a good list created go back to the previous month and see what you actually spent. Use your credit card statement to identify all the expenditures. If you haven’t used a credit card then you will need to estimate what you spent.   Write down that amount next to each category and label it “actual”.  Now go back through the list and assess what you realistically think you will spend a month in each category.  For example you will want to estimate things like clothes, because you may not buy a ton of clothes every month, but once that Nordstrom Anniversary sale hits you are probably spending some major cash.

Here are the categories that I’m currently using in my monthly budget.  Your list may be different depending on your life timeline.



Condo Assessments

Cell Phone

Car Payment

Car Insurance

Fuel for Car








Social (Food and Drink)

Lunches (if you don’t pack a lunch from your grocery expense)

Starbucks Friday

Charity Events

Mass Transit Pass

Taxi/Uber fares


Spa (includes nails and facials)

Home Decor



Creating your budget may have been easy. But the hard part is now sticking to that budget. There are things in your budget that have to get paid no matter what, like your mortgage (or rent) and there are things you can skip, like spa, home decor and clothing.  I personally make sure all the necessities get paid each month and then assess the extras after that.  Negotiable in my list are things I can afford if I have left over cash.   I bet your thinking why is her mass transit pass negotiable? It’s because I can technically walk anywhere in the city so if need be I forgo the pass that month, I can. Besides, walking is better for me anyways, right? 


You are also probably thinking what kind of home decor does this girl need every month? I thought the same thing!  The fact is that I am currently updating our decor, whether it’s furniture, art, or linens, I am updating it.  I’ve been married for a little over two years now and we are still cultivating our style together.  Saving a small amount a month makes it easier to buy that big ticket item because I know I’ve saved for it.  


So what if one month you save money for clothing or the spa and you don’t tap into those funds, what should you do with the money?  Spend it on Starbucks? No!  Put it in your savings account, so it will be there when you need it.  Tucking money into savings for regular budget items is a good idea, out of sight out of mind, right?  This doesn’t mean that you forgot the actual savings category in the monthly budget, it simply means to add more money to it, and earmark that money for a future expense in that category.


Your budget will change over the years, as your life timeline changes, and that change is the one constant. As your monthly needs change from time to time you will need to revisit your budget.  Let’s say you move mid-year and you are paying more for mortgage or rent.  You will need to adjust the budget for that.  You should actually do it before you move, but you get the idea.  I personally revisit my monthly budget annually at the beginning of the year.  It’s a good time to readjust the budget as the holidays are over and you’re most likely tired of money bleeding out of your wallet.  Plus, I’m usually in a huge money saving mode at this time of the year as well and it motivates me.  


There you have it. An easy guide to creating a monthly budget and sticking to it.  I’d love to know if you recently implemented this and how it’s going, or if you have another system in place.  Sharing money saving ideas is always a good idea.  Speaking of money saving…have you checked out my post on secret ways to save more money annually


All the items featured in this post (dress, computer, decor) I saved for the good old fashioned way and by sticking to my monthly budget!



Home Decor Details and Ideas

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