How to Create a Bulletproof Budget – Part I

Have you ever seen news coverage about a sinkhole? Usually they show pictures of some huge hole that opened up, swallowing vehicles & buildings.

Here’s the funny thing about sinkholes…they don’t happen overnight. Sure…the collapse happens overnight. But the actual erosion of the earth which caused the collapse has been occurring for weeks, months, and even years, often hundreds of feet below the surface.

While sinkholes are sometimes a surprise, they usually leave clues. Cracks in the tile floor, a leaky pool, and stair-steps in the stucco are all little signs of a possible sinkhole, which most people confuse as simply settlement.

Most homeowners ignore the cracks and the leaky pool. It’s easier to assume it’s just a little settlement than a sinkhole. In the same way, most people avoid creating a budget. They don’t really know where the money’s going, they just know they never seem to have enough. So they slowly sink further into debt, not realizing it’s just a matter of time before the collapse.

If your finances are a mess, and you’ve never created a budget before, you may be in for a little dose of reality. It may be painful. It will probably be ugly. But…the truth will set you free. So summon your inner courage, grab a calculator, and let’s go!

First Things First: Download the Debt To Life Budget Template

The easiest way to explain this is for you to actually complete each step as we go along. To help you do this, we created a very simple, yet comprehensive budget which you can download for free and fill out as we go along.

We created two versions for you, one in Microsoft Excel, and one as a PDF document which you can save and/or print. I recommend the Excel version because it does all of the calculations for you. It is also very easy to edit and customize. (Don’t have Excel? Download Calc, which is Open Office’s free version of Excel; visit Open Office for more info). Click below to download the budget template.

Excel Budget Template  PDF Budget Template

 The Nitty Gritty

As we go through this process, the temptation is to over complicate everything to make sure we don’t miss anything. Remember the first quality of a bulletproof budget? Simplicity. Resist the urge to make this harder than it should be.

There are only three steps to creating a budget. We’ll go through them in depth in Monday’s post, but here they are in all their glory:

#1: Determine your Monthly Income.

#2: Determine your Monthly Expenses and subtract this amount from your Monthly Income.

#3: Determine what to do with the leftover amount (savings, giving, investment, debt snowball, etc).

If there isn’t any “leftover amount,” figure out a way to revise #1 or #2 so that you are at least breaking even. We’ll address later next week what to do if your expenses continually exceed your income.

In the meantime, go ahead and download the budget spreadsheet. We’ll go through it in detail starting Monday, so over the weekend it would be good to review it and make sure you have all of the needed financial information in order to fill in the correct amounts next week.

Date Night

It’s Friday, and that means date night’s coming! There’s nothing more romantic than whispering sweet nothings to each other about budgets and balance sheets! This weekend’s Date Night is pretty straightforward. Simply print out two copies of the budget above (or your own if you have one), and review it with your spouse. As you do, try to think of creative ways to earn extra income, make extra cuts out of the expenses, or quickly knock off some of the debt.

We’d love to hear from you! Please post a comment below about your thoughts on creating a bulletproof budget! We respond to 100% of our comments!

Committed to your success,




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