managing money: for when you’re broke – FREE budget template (2024)

Living paycheck-to-paycheck can be an incredibly exhausting and stressful experience. Have you found yourself caught in a never-ending cycle of financial instability, where each month feels like a balancing act on a tightrope?

does this sound like you?

From the moment you receive your paycheck, a wave of relief washes over you. But it’s short-lived as you quickly realize that your money is already allocated to cover overdue bills, rent, and other essential expenses. The feeling of constantly treading water never leaves you.

Every day, you wake up with a knot of anxiety in your stomach, worrying about unexpected expenses that may arise. Every unexpected bill or emergency throws your fragile budget into disarray, putting you at risk of falling behind on payments or going into debt.

Living paycheck-to-paycheck often means constantly juggling due dates, bills, and debts. You find yourself playing a never-ending game of catch-up, desperately trying to stay ahead and avoid falling behind. The continuous cycle of stress and uncertainty can take a toll on both your mental and physical well-being.

Simple pleasures and long-term goals often feel out of reach. Dreams of saving for the future or pursuing passions become distant fantasies. The constant financial strain leaves little room for financial growth or the ability to invest in personal development.

However, amidst the exhaustion and stress, there is also resilience and a relentless determination to improve your situation. Living paycheck-to-paycheck teaches valuable lessons in resourcefulness, budgeting, and prioritization. It strengthens your ability to adapt and find creative solutions to unforeseen challenges.

are you tired of living this way?

Setting and meeting financial goals can be a difficult process, especially if you do not have much money to spare. However, it is still possible to make progress towards your goals by following a few key steps.

Setting financial goals is important for everyone, regardless of their current financial situation. Even if you find yourself in a challenging financial position, it is still possible to set and work towards achievable goals. By taking the right steps and making smart choices, you can start improving your finances and gradually build a better future. It won’t happen fast, but it will happen if you stay consistent and disciplined.

I’ve been in your shoes, and I’ve made it out. It only took a few years of sacrifice and simple pleasures. Soon, I was able to spend more time and money where I choose. But at least for now, financial freedom doesn’t mean spending whatever you want, when you want. It means knowing where and when your money is going, being prepared in case of an unexpected expense or emergency, and having a comfortable amount set aside each month to enjoy frivolous spending and entertainment. Ready to make this your reality?

Here’s how you can get started on your journey to financial freedom:

1. understand your current financial picture

There’s no way to move forward without understanding exactly where you are now. You’ll need to understand exactly how much money you’re bringing in every month, how much you’re spending, and what you’re spending it on. What percentage of your income is spent on necessities like housing, groceries, utilities, and transportation? How much is spent on other recurring expenses like Netflix, Spotify, a gym membership, etc.?

And for the hardest part: how much are you spending on frivolous purchases like fast fashion, makeup, Starbucks, or takeout?

Gather up all those numbers, and really take a look at it.

2. determine your needs and goals

When you’re broke, it’s essential to prioritize your financial goals. Maybe you want to buy a house one day, but you can’t do that until you fix up your credit score. Identify the most pressing needs, such as paying off high-interest debts or building an emergency fund. By focusing on the most important goals first, you can create a solid foundation for future financial success.

3. start with small, actionable steps

Breaking your goals into smaller, achievable steps can make them less overwhelming. For example, if your goal is to save money, start by saving a small amount from each paycheck. Gradually increase the amount when feasible and celebrate each milestone achieved. This will help you stay motivated along the way.

Make sure your financial goals are realistic and measurable. Instead of simply saying, “I want to save money,” set specific targets such as saving a certain amount each month or paying off a specific debt by a certain date. Having clear objectives will help you stay focused and accountable.

4. create a budget

I know, I know. If you’re struggling financially, “budget” is probably your least favorite word. But the reason everyone is tell you to do it is because it works. Creating a budget is crucial, especially when you’re trying to improve your financial situation. Track your income and expenses to gain a clear picture of where your money is going. Identify areas where you can cut back on spending and redirect those funds towards your financial goals.

what is a budget, anyways?

A budget is a financial plan that outlines your income, expenses, and savings goals for a specific period of time. It serves as a roadmap to help you manage and allocate your money wisely. Creating a budget involves evaluating your income sources, tracking your expenses, and making informed decisions about how to allocate your funds. Here’s a step-by-step guide on how to make a budget:

ok great, how do I make one?

Now that you know what a budget is, you can start making one. Here’s how you can get started, plus a free template to do some of the heavy-lifting for you:

1. Calculate your income: Begin by determining your total monthly income. This may include wages, salaries, freelance work, investments, or any other sources of income. Make sure to consider the after-tax amount.
2. Track your expenses: Keep a record of all your expenses for a given period, such as a month. Categorize your expenses into fixed (e.g., rent, utilities) and variable (e.g., groceries, entertainment) expenses. Use receipts, bank statements, and expense tracking apps to help you accurately track your spending habits.
3. Analyze your spending: Review your expense records and analyze your spending patterns. Identify areas where you may be overspending or where you can potentially cut back. This evaluation will help you make informed decisions when allocating your income in the next step.
4. Set financial goals: Determine your short-term and long-term financial goals. These goals may include building an emergency fund, paying off debt, saving for a vacation, or investing for retirement. Setting clear goals will help you prioritize your expenses accordingly.
5. Allocate your income: Based on your income and goals, allocate your funds to different expense categories. Start with essential expenses such as housing, utilities, transportation, and groceries. Then allocate a portion for savings and debt repayment. Finally, distribute the remaining funds for discretionary spending on non-essential expenses.
6. Monitor and adjust: Implement your budget and regularly monitor your progress. Compare your actual spending to your budgeted amounts. This will help you identify any areas where you may be overspending or need to make adjustments. Be flexible and make necessary changes to your budget based on changes in your financial situation or goals.
7. Use budgeting tools: Consider using budgeting apps, spreadsheets, or online tools to make the budgeting process easier and more organized. These tools can automate calculations, track your spending, and provide visual representations of your financial progress.
8. Review and refine:Review your budget periodically, such as on a monthly or quarterly basis. Take the time to analyze your financial situation and assess whether your budget is still aligned with your goals and priorities. Consider any changes in your income, expenses, or savings goals and make the necessary adjustments to your budget. Refining your budget regularly will ensure that it remains relevant and effective in helping you achieve your financial objectives.

5. build an emergency fund

Having an emergency fund and budgeting for unexpected expenses are essential pillars of financial stability. Life is full of surprises, and being prepared for unexpected financial setbacks can alleviate stress and help you stay on track with your long-term financial goals.

Determine how much you want to save for your emergency fund. Financial experts often recommend having at least three to six months’ worth of living expenses set aside. This amount can provide a safety net during uncertain times.

Pro tip: Treat saving for your emergency fund as a priority expense. Allocate a specific portion of your income towards savings each month. Automating your savings by setting up automatic transfers can make it easier to consistently contribute. Even just $5 per paycheck starting out is better than nothing.

Open a separate savings account dedicated solely to your emergency fund. This separation can help prevent you from dipping into the fund for non-emergency purposes. Choose an account with a competitive interest rate to help your savings grow over time.

In addition to your emergency fund, consider budgeting for specific unexpected expenses that may arise in your life. This could include things like car repairs, medical bills, or home maintenance. Having a separate category in your budget for these expenses can help you be better prepared.

6. seek financial education and guidance

Finance isn’t something you’re just magically supposed to understand, even if society treats it that way. Realistically, it’s something your parents should have taught you how to manage before you became an adult, responsible for your own money and choices. Unfortunately parents and schools failed to teach a lot of us some really essential knowledge, so now it’s up to you.

There are many free resources available online, such as blogs, podcasts, and personal finance books. Additionally, you may benefit from speaking with a financial advisor or counselor who can help you navigate your specific situation.

7. practice discipline

Improving financial literacy and setting financial goals is not a one-time activity; it requires ongoing motivation and discipline. Keep reminding yourself why these goals are important to you and the positive impact they will have on your future. Find motivation in small wins along the way and celebrate your progress. Stay disciplined by sticking to your budget, making conscious spending choices, and staying committed to your financial goals even when faced with challenges.

8. cut expenses and frivolous spending

When you’re broke, adopting a frugal lifestyle can be instrumental in achieving your financial goals. Look for ways to cut back on unnecessary expenses and find creative ways to save money. Consider alternative options for entertainment, explore free or low-cost activities, and prioritize your needs over wants. Embracing frugality will have a significant impact on your financial well-being.

Consider where you could reduce your expenses. If you’re getting takeout 5 times a week, how much money could you save by reducing that to once or twice a week, and cooking more at home? If your cell phone bill is taking a huge chunk of your paycheck every month, can you lower your data plan or cancel the line on that tablet you never use?

I know that “don’t buy Starbucks” has become a cliché in the world of financial advice, and you might think that $5 here or there isn’t enough to make a big impact. And truthfully, it isn’t on its own. But think about the impact it would have if you went to the grocery store and suddenly everything cost $2 more than it did yesterday. That’s what happens when the mentality of “it’s just $5” take its hold on you.

Pro tip: Instead of treating yourself to a $5 expense literally whenever you want, add frivolous spending as its own category into your budget. So “$5 whenever” becomes no more than “$50 per month”, or whichever number suits your financial goals.

9. increase your income

While it’s important to focus on managing your current financial situation, it’s also essential to explore opportunities to increase your income. Consider taking up a side gig or freelancing to supplement your earnings. Look for ways to develop new skills that can enhance your employability and lead to higher-paying opportunities. Increasing your income can accelerate your progress towards achieving your financial goals. Here are some options to keep in mind:

1. Explore freelancing or business opportunities: Consider offering your skills and services as a freelancer in your field of expertise. Websites like Upwork, Freelancer, and Fiverr can help you connect with clients. Identify a market gap or a need and launch a small side business. This could be anything from selling handmade crafts online to starting a consulting service within your area of expertise. Or identify if your hobby can be turned into a side hustle. For example, if you love photography, you can offer your services for events or sell your art as stock photos or prints.
2. Try to get a raise or promotion: Talk to your supervisor about your career goals and express your desire to take on more responsibility. Aim for a promotion that comes with an increase in pay. When starting a new job or during performance reviews, negotiate your salary based on your qualifications and the value you bring to the company.
3. Invest in your education: Continuously learning new skills and improving existing ones can enhance your professional value and open doors to better-paying opportunities.
4. Take on extra work: Consider taking on an additional part-time job to supplement your income. Look for opportunities in areas of your interest or expertise. If your current job offers overtime or extra shifts, take advantage of the opportunity to earn additional income.
5. Rent out extra space: If you have extra space in your home, consider getting a roommate or renting it out on platforms like Airbnb or to local businesses in need of storage.

10. stay flexible and adapt as needed

As you work towards your financial goals, it’s crucial to remain flexible and adapt to changes. Life can throw unexpected curveballs, and your financial situation may evolve over time. Be willing to reassess and adjust your goals and strategies as needed.

Remember that progress is not always linear, and setbacks are a part of the journey. Financial literacy is a skill that takes time and consistency to learn. It’s not realistic to expect yourself to master it right away. Stay resilient, keep moving forward, and most importantly, don’t give up.

-w.w.