7 ways to improve your budgeting skills

As a financial counselor, I have had the opportunity to discuss personal finances with a variety of different people. The budget is almost always one of the first things we address. I cannot emphasize enough the importance of having a monthly budget– it is the key to achieving all of your personal financial goals. It will change your personal financial world, if you do it right.

In my conversations with people I have noticed a few things:

1) Almost everyone believes they have a budget.

2) Almost everyone doesn’t really have a budget.

3) They can do better.

We all can do better. Just like in all other aspects of life, there is always room for improvement.

Here are seven ways you can better master your budgeting skills.


If it isn’t written down, it doesn’t exist. Having the budget “in your head” doesn’t really count for having a budget. I don’t care where you write it down– it can be on a piece of paper, a yellow pad, or on an excel spreadsheet. Just make sure you write it down.


You have to have a method of tracking. What’s the point of making a budget and establishing guidelines, if you have no way of knowing whether or not you are actually staying within those guidelines? Track your expenses.

A really great way to track your expenses is with the Mint.com mobile app. It easily and securely links your bank accounts, categorizes your spending, and uses little line graphs to help you track how much money you have spent in any specific category. It will also send you alerts when you are reaching your spending limits. However, a simple piece of paper, envelopes, or an excel spreadsheet works just as well. Find which method works best for you and do it.


Before doing anything else, cover the household necessities first. Food, shelter, transportation, and utilities are the first things you should include in your budget. If you are a tithe payer, then tithing should be the included in this list. Additionally, make it a priority to budget for savings– you should at least have a decent emergency fund if nothing else. And never pay on a credit card or debt before paying your rent, mortgage or utilities. That’s just dumb.


After you have covered the basic household expenses, you can begin allocating money to cover any debts you might owe. This includes credit cards, student loans, medical bills, or any other debt obligation in which you are making monthly payments. Prioritize them. I recommend listing them in order of smallest balance to largest balance, paying the minimums on everything but the smallest debt, and paying off the smallest debt as fast as possible with any extra money you can squeeze from your budget.

If there is a debt that is past due or a looming judgment, put resolving those debts at the top of this list.


Too often we are turned off to the idea of budgeting because it feels restrictive. It is not restrictive. It is actually the opposite. It gives you more freedom and control of your money. But you need to be reasonable when making a budget. You are going to spend some money on personal stuff, so plan for it– give yourself some “pocket change.”


Make sure every dollar of your income is allocated toward something specific. Your income minus your expenses should equal zero. Every dollar should be accounted for. Using a budget sheet can be helpful when planning your spending. It can help remind you of a spending category you might have looked over. One of the biggest mistakes I see in budgeting is people leaving something out of the budget. Do you have a gym membership? Do you have a subscription to Netflix? What about haircuts and pedicures? It’s easy to overlook some things in your budget. Make sure there is money allocated to cover whatever it is that you will be spending money on.


Depending on your income and debt situation, you might or might not have enough money to cover everything. If you are running on no surplus or very little surplus, you might have to cut out some of the waste. You might have to cut the cable or downgrade your service. Maybe you can only afford to go out to the movies one night this month rather than every weekend. Ladies, maybe you can’t afford that weekly manicure. And guys, you might just have to pass on golfing a few times this month.

I don’t know what you need to cut out of your budget, but if you don’t have enough money to cover everything, then something needs to go. You can make that call. What I do know is that you cannot afford to continue to spend more than you make. That just doesn’t work.

When you budget properly, you will be amazed at how much money you are actually wasting and how much more money you can actually save. There is room for all of us to improve when it comes to managing our money. The budget is where we can make it happen.

7 things that will help you eliminate debt

Are you sick and tired of being in debt? Yeah, me too. I hate debt. That’s why I decided to eliminate it and avoid it for the rest of my life.

So how exactly does one go about eliminating debt?

It can be a daunting task. Especially if you’re in a situation like I was– at one point having over $50,000 of debt– but it is possible to get out of debt. And you can do it.

Here are seven things you can do that will help you dump your debt.

1. Decide you’re done with debt

If you aren’t fully committed to stop using debt, it is going to be very difficult to get yourself out of debt. You have to change your mindset and completely overhaul the way you operate your personal finances going forward. You cannot dig your way out of a hole if you continue to dig out the bottom. Stop using debt, cut up your credit cards, and start filling in that hole.

2. Get an emergency fund

Begin by setting aside a small emergency fund of about $1000 dollars. This will give you a little bit of cushion as you ween yourself off the credit cards. Having some money set aside for unexpected and unplanned events in your life will help keep you from running back to the plastic. It’s not only an emergency fund, it’s a security fund. It will help secure your personal financial life and give you the foundation you need to begin making some serious get-out-of-debt progress.

3. Use the budget

Budgeting is always going to be part of anything personal finance. It is the key to achieving all of your personal financial goals. Without budgeting, you won’t get very far. Use the budget to minimize sending and track expenses. Squeeze every extra dollar possible you can out of your income. You might want to consider cutting your cable, reducing your internet or cell-phone plan, or avoiding restaurants until your debts are paid off. A good, detailed budget is the catapult to debt elimination.

4. Focus on one thing at a time

Doing too many things at once can dilute your get-out-of-debt progress. If you are trying to save, invest, give, and eliminate debt all at the same time, you’re going to struggle. Instead of doing a bunch of things okay all at once, focus on being excellent at one thing at a time. I would recommend not contributing to retirement while you are getting out of debt. I’m not saying to unplug your investments forever, but for the interim while you get out of debt. If you’re honest about eliminating debt, on average it should take about 24-48 months.

Think about it… What is the best way to get an 18% return on your money? Get rid of that 18% interest credit card. As soon as your debts are gone, you can restart your retirement and you’ll have a bunch more money to contribute.

5. Use the debt-snowball method

Snowballing your debt is the fastest way to get out of debt. If you’re a math person you might argue that it isn’t always the best way or it doesn’t always offer the biggest savings in the end. But you’re math equation is missing one important factor– momentum. You cannot underestimate the power momentum has in getting you out of debt.

To snowball your debt, list all of your debts from smallest balances to largest balances. Pay the minimum payment on all your debts except for the smallest debt and put every extra dollar you have on your smallest debt. Once that debt is paid off, roll the minimum payment into the next debt– your new minimum payment would be the sum of those two debts. For example, if you’re smallest debt had a minimum payment of $25 and your second smallest debt had a minimum payment of $50, once the first debt is paid off– you’ve freed up that $25– your new minimum payment on the second debt would be $75. And so it goes, your minimum payment gets bigger and bigger as you pay off your debts. The snowball creates momentum.

6. Adjust your tax withholdings

A lot of people look forward to getting that big tax refund when tax season rolls around. Many people even use that refund to pay down debts, which is great. However, I think more debt reduction could be done on a monthly basis if more of that income was to come home, rather that withheld by the government at no interest. Getting a tax refund typically means you overpaid and the government is refunding you the difference. You should adjust your allowances on your W-4 so when April comes you don’t owe, but you don’t get a refund either.

What could you do with an extra $200 or $300 a month? I think it could definitely boost your debt elimination plan. Plus, the sooner you pay off your debts, the less interest you pay.

7. Find extra income

Okay, I know it isn’t easy to find extra income. And I’m not saying you should go out and take on another full-time job or put your wife to work. But find some quick, simple ways to get a little extra cash you could dump on some of your debts to speed up the process. Every extra couple hundred bucks helps and gets you there that much quicker.

Maybe you have some things around the house you can sell. Are there extra shifts you could take on at work or is there overtime available? What about delivering pizza on the weekend or a couple nights a week? Starting a small business on the side is a great way to make some extra income. Nowadays you can even make a couple hundred dollars a month donating plasma– I know, because I’ve done it. Get creative in finding a little extra money you can put towards the debt. Faster is better.

I can tell you from experience that getting out of debt is not easy. I’ve paid off over $50,000 of debt and I’m still working through it. It takes a lot of work and even more sacrifice. It takes paying attention. Learning to tell yourself no is hard. But in the end it will all be worth it. Just think of what you will be able to do if you free up that $400 car payment or that $275 payment you send religiously to Mastercard. What if instead you paid yourself $400 per month?

Without debt, you have complete control of your greatest wealth building tool– your income. Now go and eliminate your debt. You deserve it.