Budget Your Way to Financial Freedom in 5 Steps

February 2, 2017

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When my wife Nicole and I started our marriage, we were $50,000 in debt and spending money like it was our full-time job.  I, for one, had no issue going on vacations, driving cars and updating our home all on credit.

When we started thinking about having kids, Nicole and I knew it was time to break our addiction to debt.  We knew we needed a plan to master our money.

We had heard that developing a monthly budget could help us in eliminating debt, saving more money and reaching our goals.  So, we gave it a go.  It was rocky at first, but soon it became habit.

Fast forward six years later, we’re debt-free, our net worth has increased by $800,000 and we are mortgage free. We’ve never been happier.   

The catalyst for this major change in our lives was creating and sticking to a monthly budget.   

Here are the 5 steps we took to own our future through budgeting:

1. Find Your WAY Through Your WHY

Before you start your budgeting process, you need to set out clear objectives by answering some questions.  

  • Why are we budgeting?  
  • What is our purpose?  

When Nicole and I decided to have kids, my purpose (or my Why) was clear.  I wanted to make sure our kids had the best lives possible – no students loans to worry about, memorable annual vacations together and parents that didn’t stress about money.  Without this ‘why’, I don’t think I would have ever changed my path.  

Pause for a moment here … Think about your “Why” for getting on a budget.  

Outside of saving more money and eliminating debt, what end results are exciting to you?  Could you …

  • Go on that dream vacation?
  • Upgrade your car?
  • Change into a different career that you love?  
  • Give to a charity you feel passionate about?  
  • Help out a friend in need?  
  • Vacation more?   

Write down your “Why” and keep it as a strong reminder as you develop your budget each month.

2.  Level Set with Your Partner

If you’re married or thinking of getting married soon, share your life and financial goals with your partner and ask them to do the same with you. In order for you to succeed with the budgeting process and stick to it, your partner needs to be on the same page.  

Once you learn about your partner’s goals, write them down and put them together with yours.  Sit down on the comfy couch, review the goals and dream about how amazing your lives will be when you achieve them.

After that, you’ll be motivated to develop your first budget … as a team.  
3.  Choose Your Weapon

If you’re headed into battle without the right weapon, you’re going to get slaughtered.  Same goes for budgeting!  

Your budgeting weapon can be a piece of paper, an excel form or online programs like Mint, Every Dollar or YNAB (You Need a Budget).  I highly recommend testing out different methodologies to see which weapon feels right in your hands.  

Our family started with an excel document since we didn’t have a lot of expense categories in the beginning, but then moved over to Mint a few years ago.  

I’d highly recommend checking out Mint. It is FREE, it has a very intuitive app and it syncs up with your accounts to track your spending. We use it and love it.  

If you’re not into the online tools, don’t let that stop you from getting started. Grab a piece of paper, write down how much money you make each month and subtract that amount of the money you spend each month. If you don’t know how much you make or spend each month, take advantage of this moment and find out right now. It’ll make a monumental difference in your life.  

4.  Create a “Budget Party”

The key to success in budgeting is maintaining consistency.  You can do this by setting a specific date each month and ensuring both you and your partner will be attentive and engaged.  We’re talking about your future here people!

Side note … 

When I originally proposed these monthly get togethers to my wife, it took a little convincing.   “Staring at the numbers” didn’t sound like the most exciting thing to her.  

I knew a name like Budget Meeting or Finance Review wasn’t going to entice her … I thought “Hey, I’ll call it a Budget Party”.  Everybody likes a party, right?

Well, my wife is pretty smart so she saw right through my naming tricks. She pointed out that looking at spreadsheets and talking about finances didn’t equal a “party” even though I thought it was super fun.

We agreed that a little pizza and some wine would definitely make it more party-like.  Now it is a running joke that I still call it a “Budget Party and she sort of rolls her eyes at me, but it worked because she loves our get togethers now.

I digress

We get together on the 1st of the month and review 3 main things:

Last Month’s Spending

    1. Where are we over budget?
    2. Where are we under budget?
    3. What areas do we need to adjust for next month?

Current Month’s Plan

    1. What events do we have (birthdays, weddings, etc)?
    2. What areas do we need to adjust this month (heating bill increases – curse you Michigan winters!)?

Future Dreams

  1. What do we want to do when this mortgage is gone?
  2. What trips do we want to go on?  
  3. When are we taking the kids to Disney for the first time?
  4. When can we join that swim club down the street?

Whether you have pizza, wine or go on a date out of the house, find a fun way to integrate budgeting into your relationship.

Who knows? You might just like it!

5.  Celebrate the Wins

If saving money and creating an emergency fund is your goal, make sure to celebrate that milestone moment when you hit your goal number.  

If you’ve made your last student loan payment, go crazy and have a flippin’ party! This is a big deal! Celebrate your victory!  

It can be very motivating to put a reward out there for yourself when you achieve your personal finance dreams. Nicole and I bought a nice bottle of champagne and put it in the refrigerator to drink on the day we both owned our cars outright with no loans or leases. When we had enough money to make that situation a reality, those bubbles tasted that much sweeter.  

And financial victory can also be very addicting. Once you hit one goal, you feel empowered to do a lot more than you ever thought possible.  

Our next goal is to have our mortgage paid off by December 2017. This is something we never even thought was possible when we started budgeting six years ago.

The goals and dreams we will reach next will change our family tree for generations to come.  

What financial dreams do you have?

What strategies do you use to help you control your money?

This post was originally featured on Financially Fit & Fabulous on December 30, 2016.

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


  • This is fantastic. I love the budget party idea and including the future goals review. Our budget review right now consists of me running the numbers and giving my wife a summary. She hates it because she feels like a kid being told what to do but she also hates staring at a spreadsheet with me. Beer and pizza to the rescue.

    Love the blog. Just found you but you got a new subscriber.

    • Thank you so much Grant! I can completely empathize with your situation. I constantly try to remind myself that I need to tailor the budgeting process to make it more fun and enjoyable for my wife. Last month, we went out to a nice dinner and brought our receipts and laptop with us! That went over better than any other get together we’ve had in the past. No kids, wine, good food and of course … the budget.

  • I’m 66 and retired (at 61)…and cannot relate to you at all. I’ve almost always just purchased what liked and needed. I’ve never avoided stores in fear i would purchase un needed stuff….i food shop with a list with just my basic needs ,,,but am open to change for sale items and in season deals….i use coupons, but only on items that i regularly buy……. on clothing i hardly purchase at full price…way too many discount outlets and online options…..i believe alot of consumers do this and that is why the major retail full price clothing stores are now scaling down …. Fortunately, my children have learned this and follow my example…
    We never made alot of money…but spent it wisely….ending up with several rental units…which are allowing us a very comfortable retirement….

    • Sounds like you’ve done really well for yourself Roberta! My wife and I are interested in rental units ourselves. Through our monthly budgeting process, we’re working to retire comfortably like you. And we’re hopeful our kids will follow in our footsteps too!

  • The “why” is so important-making a lasting change really does need to start with that. My weapon of choice is a zero-based budget in YNAB. It’s made a huge impact on me when I overspend to have to pull money out of another category (like my vacation fund!) to cover my overspending since all my money is allocated to goals in advance.
    I’m absolutely terrible at involving my husband in the budget. I need to utilize some of your tips!

    • I’ve heard great things about YNAB! The transparency that software tools (like YNAB) bring for everyday budgeting is crucial. Good luck on getting the hubby involved more! I would love to hear how your conversations go.


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