How to Budget the Abundance Financial Way

How to Budget the Abundance Financial Way

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So many people are convinced that they don’t know how to budget, or that every time they try it just doesn’t work for them. But the real problem is that most people have been taught to budget the wrong way.

The traditional budget

The traditional budget

Look familiar?

If you google “budgeting template” you will get more than 18 million results, most with some version of the same worksheet above. The traditional budget fails 80% of the time. Eighty percent! Despite so many so-called “helpful” templates out there, the bottom line is they just don’t work for most people, even though it’s the way that’s most commonly taught.

The traditional budget is geared more toward corporations, and not designed for the way our personal finances work. It would be great, if just like in these spreadsheets, we received all of our income first thing in the month, paid for all of our necessary expenses, and then were free to take out the remaining in cash to spend throughout the rest of the month. That’s just not how life works.

Despite its fundamental flaws, this method continues to be provided as a solution by financial professionals, even though it fails to solve most people’s budgeting problems. We have a better way. At Abundance Financial Coaching, we teach a budgeting system that reflects the way you actually live your life. It allows you to easily and realistically project where your finances will be at virtually any time in the future. It will help you find clarity with your money, and lead to peace of mind around your finances.

Your budget should ebb and flow to match the timing of your life. The most important points in your budget should not be the beginning and the end of the calendar month, they should be the actual dates that you get paid and the dates that your bills are due. This is the basis of the Abundance Financial Budgeting Method. We’ve broken it down into a three-step process that will change the way you look at your monthly budget, and help you see your finances in a better way than you ever have before.

Want help setting up and sticking to your budget?

Coach Amber is here to help.


Ready to jump in? Great! Let’s walk through the process step-by-step.

The Abundance Financial Budgeting Method

The Abundance Financial Budgeting Method

Step One: Get Organized

Before you can craft a good budget, you need to know the numbers. You’ve likely got a number of expenses that are fixed. They happen monthly, on a set due date, and are the same amount (or within a predictable range). Most people refer to these expenses as their bills - things like a mortgage payment, utility payments, car payments, minimum payments on debts or credit cards, but also things like Netflix or Amazon subscriptions, and maybe things like a gym membership.

Do you just sort of “know” when these bills come around, or do you have them written down somewhere? Or maybe you just rely on that reminder email or text to make sure you don’t miss it. You need to get these put down in a place you can see them, so you can stop wondering if you accidentally missed something. Make a list of all these bills that includes:

  • The bill description

  • The bill amount

  • The due date

Super important! Make sure this list is organized by due date! Many traditional budgets will list your expenses from the highest to the lowest amount, that’s not what we want to do.

Organizing the bills by due date helps you know the timing of when they need to get paid, and when you match that up with your paychecks, it gives you a realistic look at the amount in your bank account at any given time. On payday, you will know at a glance what needs to be paid between now and your next payday.

Sound simple? It is! Don’t let that fool you into thinking that it doesn’t make a big difference. Small changes like this are how we help you gain clarity around your finances and organize them in a simple way. We’re not here to make things more complicated, we’re here to make them easier!

Step Two: Create a new Spreadsheet

If you’re not familiar with excel, or don’t even have the program, don’t let that make you shy away from this step. You don’t need to be a wizard or even own excel to complete this step. We recommend creating this spreadsheet in Google Sheets, which allows you to access it from any computer, and even share it, which is super helpful when you share finances with another person!

It’s very common in relationships for there to be one person that is primarily responsible for money management, but having a file that is accessibly by everyone helps to keep everybody on the same page. We encourage couples to be involved and know what’s going on, even if they’re not actively managing the money.

Step Three: Create Your New Budget

Here’s where it all comes together! Let’s start filling in the spreadsheet with your new budget.

List your next three paydays and the amounts of each paycheck at the top of each column. The first line of each new column is going to be your paycheck amount. The next line will contain your current bank account balance. Under that, you’ll list all of the bills that need to be paid between this paycheck and the next. Remember, we keep them in due date order, not by amount. After you’ve listed the bills for that pay period, you’re going to list the recurring expenses you have each month like groceries and gas. These are things that aren’t a fixed amount or due on a specific date.

Once you’ve got everything listed, total it all up at the bottom. This number will be what should be in your bank account when you come around to your next paycheck.

You’ll do the same for the next column - listing and totaling all the expenses for that pay period - but unlike column one, instead of your starting bank balance listed under your paycheck amount, it will be the remaining amount from the column before. The same goes for the third column and each one moving forward after that.

At this point, you’re likely seeing the flow of your money a month out, and hopefully seeing the amount left in your bank account slowly increasing.

Let Abundance Financial Coaching help you create and implement this budgeting system.


Steps to Success with Your Budget

This budgeting method takes a little getting used to. We’re sure you’ll get the hang of it, but here are some helpful hints to keep you moving in the right direction:

  • Take out cash once per pay period to pay for day-to-day spending and groceries. Not used to carrying cash? Take our word for it, give it a shot and see how it helps you stay on top of those little expenses that add up.

  • Overestimate your bills. We want to have some built-in safety nets that will help when the unexpected happens. If you have a bill that fluctuates, like water for example that ranges from $120 to $150, always put the $150 into your budget. When you do this, you’re creating a cushion that can come in handy when the unexpected happens (and trust us, it will!)

  • Set goals for the “extra”. When you have money left over at the end of the month, be intentional with it. If you just see it as free money, you’re more likely to just blow it. But, if you already have goal set, it can help you get there even faster. This is a great way to help you pay off debt, take that dream vacation, or be able to pay cash for your next car.

  • Forecast out at least three months. One month doesn’t give you the whole picture of your money. Seeing at least three months out really helps you get a grip on the ins and outs of your budget. Not every month is going to have the same expenses, either, so it’ll give you a clearer picture.

  • Avoid adding expenses or upping your spending money after the month has begun. We know things can pop up, but by overestimating and giving yourself a cushion, surprises should be minimal. Try sticking to a spending amount for a few months before adjusting, but if you’re routinely going over your budgeted amount, then it’s time to increase it. Remember, we’re trying to create a realistic picture of your spending, not try to hold yourself to impossible amounts.

Welcome to your Better Budget

Different from what you’re used to? Good! We think in this case, different is definitely better. When you budget based on the dates of your paychecks and bills, you’re much less likely to be surprised.

Say good bye to that moment you realize that three major bills are due and you still need money for groceries. Granted, you’re still using a spreadsheet like in traditional budgeting, but this one is unique to your situation, not a generic formula that doesn’t really work.

We’re confident once you try the Abundance Financial Budget, you won’t go back, especially if traditional budgeting has failed you in the past.

If you’re serious about a major budget over-haul, learn about our Blueprint Sessions or schedule a free 15-minute Q&A session with Financial Coach Amber. Learn how you can implement the Abundance Financial Budgeting Method and take control of your finances. You have nothing to lose.

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