The Budget that Changed My Life

Since I’ve started coaching, I’ve often been asked by friends or family how I came to enjoy personal finances, or why I felt pulled towards helping others with their finances. Well, it’s a long story. But the answer, in part, comes from the day I finally ‘figured it out’. The day I made a budget that worked for me and forever changed my financial life. It’s not for everyone. Each person has their own journey, their own spending habits, and as a coach I encourage everyone to find the system that works best for them. But that moment, the moment that everything clicks into place, that’s universal. I want to share with you my moment, and the story of the budget that changed everything.

Whenever you hear anyone talking about budgeting, whether they’re a financial coach, or a lifestyle blogger, the top tip is ‘put everything into categories’ ‘spend within your limit of that category’ and there are tons of options like food and utilities and clothing and rent and housing etc. Some of those are pretty easy. The fixed expenses like rent, monthly subscriptions, car payments, etc. they’re all an exact expense every month. They’re easy to fit in those boxes. Even the somewhat variable expenses, like gas, utilities, food etc., you have to pay every month, you always need to heat your house, you always need some sort of transportation, whether it’s $50 or $150 there’s still a cost there. But I had a really hard time fitting things like clothing, toiletries, cleaning supplies, all the ‘lifestyle’ items that I didn’t necessarily buy every month. Even to fit ‘entertainment’ in to an exact number was tough for me since all the months were different. Some months I felt I had to go out a lot, some months I didn’t leave my apartment. I hated having to be confined by whatever number I put in those categories. I would constantly overspend in one category, and spend nothing from another. Leaving myself completely confused as to if I was actually on track or not when it came to my finances. 

How I Budgeted Instead: 

Step 1: The Setup

I decided to do a complete overhaul. I listed all of the things I felt as ‘Monthly expenses’ things I had to purchase no matter what every month. Then I took a look at the leftover money, and split it into two categories: “Savings” and “Lifestyle Spending”. I made sure there were enough savings to meet my goals, at least 20% of my overall income (because I had read that was the thing to do!) and then I gave myself the leftover amount to spend on whatever the hell I wanted. 

Step 2: The Cash Diet

This helped IMMENSELY. At first, when I was creating the habit, I went on a cash diet. Every month I took out that ‘lifestyle’ amount I’d given myself to spend, split it up into 4 weeks, and put one weeks worth in my wallet. This really helped me visually track what I was spending. If, on the third day of a seven day stretch, I had only 1 $20 dollar bill left, I knew I’d be in a tough spot at the end of the week. I had to learn to curb my spending pretty quick. At the end of each week, I added the next week’s cash to my wallet, and rolled over any unused amount into the next week. This kept me completely on track for the rest of the entire month! 

Step 2B: Extra Savings

Some months, I’d have unused money leftover from what I budgeted. I always put it all in a little piggy bank before giving myself a whole new months worth of cash. I know, ‘piggy bank’ sounds juvenile, but because it was cash that wasn’t going back into my account I tricked my brain into thinking that I’d spent that money. I didn’t miss it at all! At the end of 6 months, I had enough to go on a mini vacation with my partner! A VACATION. FROM MY SPARE CHANGE. 

Step 3: Reevaluating

This system changed my life. Every month, my essential bills were paid and taken care of without me having to think about them. I made sure everything was taken automatically out of my account and allocated to whoever it needed to go to. It gave me such peace of mind knowing that I could just live, with whatever cash was in my wallet and I’d be completely ok. I did this for a long time, and until I paid off my debt I didn’t really think about it again. Once I got a hold of my spending, and I had gotten out of my debt, I decided to transition off the cash. I now pay for most things with card, but I still keep to my ‘lifestyle spending’ rule. Each dollar I make has a job. My essentials are top priority, savings are second, and what's left is what I am allowed to spend. It’s what I can afford to spend. It’s sustainable. Every 6 months, I reevaluate. I check-in with my savings goals, I make sure all my essentials are actually essential, and I make sure everything is still relevant. If I get a raise, or some extra income, I allocate it according to the percentages. It’s all set up so that I can reevaluate at any time, and know exactly what I should place where. 


For me, this is my healthy financial life. It sounds silly, but it’s given me such a profound understanding of what money means to me, and how an adult financial life is supposed to work. I don’t feel lost anymore, or scared that I’m missing out on something important. I have everything planned, I know exactly how I am going to afford to pay my bills every month, I know exactly how I am going to afford each savings goal I have. 

THIS is why I’ve become a financial coach. No matter how much you make, what you want to save for, or how you want to live your life, you can find a system that works. We all can have that ‘aha’ moment where everything clicks into place. For me, it was only when I stopped listening to everyone else’s advice that I really took a look at what would work best FOR ME. As I said at the beginning of this post, this isn’t a one-fits-all solution. Some people will want to budget differently, and that’s ok! You just have to find the sustainable system that works for you. 

Think you’d like to try this system out? I’ve created a fillable budget template! Just sign up for my mailing list, here, and you can get all the info you need to integrate this into your own life!