Before we dig into today’s subject, I want to make sure you have read Part I of this series. Today’s lesson really builds on what we discussed last Thursday, so if you missed it (or if you need a quick refresher, read it now!)

Last week, you discovered where you’re starting. And, if you followed directions, you got a good idea of your financial habits and where your money goes.

Today you’re going to learn how to actually create a budget. You’ll discover how to be a wise manager of your money, instead of constantly wondering why your money keeps slipping through your fingers.

I know, I said this last week, but I really want you to remember this as you read today’s message: Budgeting is not a prison! It’s not about saying, “You CAN’T do this! You CAN’T do that!” The purpose of a budget is to help you manage your money according to YOUR priorities, so you can have the future YOU want.

Without a financial vision, only financial destruction awaits. A man without a vision will perish. And, there is so much marketing around us – free shipping, save 20%, buy one get one free – it can suck us in so easily! If we don’t have a vision and a plan, BAM, there goes our money! Someone else’s financial vision (the marketer) is going to supersede your own. You and I have both done this! But that’s not how it’s supposed to be! Your hard-earned money is supposed to build your wealth… NOT the marketer’s!

So, with that said, let’s get busy! There are four main categories you’ll use to create your budget, and each category has a percentage attached to it.

Giving: 10%

There are lots of “secrets” out there from people telling you how to succeed and make more money. But the biggest secret I can give you, which helped my husband and I to succeed in business and build true wealth, is so simple, yet so powerful. The secret? Giving.

I could go on for hours about the importance of giving. Money is an incredibly powerful tool. It can provide food to someone who is hungry, a home to someone who is homeless, and take care of those who cannot take care of themselves. It all comes down to this: you will reap what you sow.

Certain laws of wealth are in effect, whether you believe them or not. The wealthiest people in the world practice these laws. Giving is one of them! The wealthy GIVE!

Bottom line, 10% of your income should go straight to taking care of the orphan, the widow and the poor. This is not an afterthought. This is 10% right off the top! Notice how you factor it right into your budget. It’s that important!

If you want an in-depth teaching on this topic to help you really grasp the importance of giving, and learn how you can implement this in your life in a much bigger way, click here.

Saving: 10%

Part of the problem we have in this nation (and around the world) is our concept of saving. For some reason, we seem to think “saving” is simply sticking money back for a rainy day! This is NOT meant to be spent! You’re not saving for a new flat-screen TV, a shopping spree or a new car!

Saving does not mean “saving to spend!” It means saving! If you need to put this money into an account you can’t easily access, do it!

Let’s face it, life happens. Houses flood, cars break down, people lose jobs and medical emergencies happen. As much as we like to think those things will never happen to us, we’re just kidding ourselves! When you don’t plan ahead to prepare for the bumps in the road of life, that’s when you get into trouble!

Debt/Investing: 10%

A full 10% of your budget should be devoted exclusively to paying off your debt. If you don’t own “War On Debt”, this must be your first investment! That system will teach you how to annihilate ALL of your debt, including your mortgage, within 5-7 years. You’re going to learn how to find hidden money, and what to do with that money to get you the best results. “War On Debt” will put you on the fast track to financial independence.

If you have debt (credit card, car, mortgage, medical, etc.), 10% of your income should be going straight to paying off your debt. And, if you’re already debt-free, this is your chance to use that money to grow you MORE money – through investments!

Living Expenses: 70%

After giving, saving and paying off debt or investing, you have 70% of your income left. This is what you will live on. This includes bills, groceries and everyday expenses.

And, an amazing thing about this is, you can always find ways to live on less than that 70%. Using little tips and tricks enables you to spend less… whether it’s at the grocery store, on your electric bill or cutting out unnecessary expenses.

Remember last week, when you separated your necessities from your luxuries? THIS is why that step was so important! Luxuries can so easily eat up the remaining 70% of your income, leaving nothing to take care of your necessities!

So once you add up all of your necessities and put them into this category, you may have some extra money left. DO NOT start adding those luxuries back!

Any money you have left over goes into the DEBT category! So for instance, if you are living on 50% of your income instead of 70%, you have that extra 20% you can rollover to annihilate your debt even faster! The faster you eliminate your debt, the faster you get to build your wealth through saving and investing! This is the fun part!

And speaking of fun…

By this point, you’re probably thinking, “Ugh, Dani, I thought you said budgeting WASN’T a prison! But you keep telling me I have to cut out all of the luxuries in my life, and I can’t go shopping or go on vacation or buy a new TV or cell phone. Budgeting is such a drag!”

That’s why we have something called a fun budget! And it’s exactly what it sounds like…

While you’re sticking to your budget, paying off your debt and being faithful with the income you’ve been given, it’s important to reward yourself for all that hard work! This is your fun budget.

Years ago, I used to spend $25,000 a month on shopping, going to nice restaurants with friends (and picking up the bill) and buying gifts (and even vacations) for my friends! Until I became convicted, money and greed led me, instead of being led by purpose! So, I cut myself off and gave myself a budget of $100 a month to use however I wanted. I could go out to dinner, buy 8 pairs of shoes at Walmart, save up for 3 months and buy one pair of shoes at Nordstrom, save it up for a while to go on a vacation, or anything else I wanted!

Something amazing happened when I did this. It stopped me from shopping daily, weekly or even monthly. It caused me to put blinders on, so I wouldn’t even see what was available to buy since I would have to wait until the end of the month to get my $100. It had to be something I really, really wanted. It made me prioritize. How important was the thing I wanted? Was it worth spending my $100 on?

This was so powerful for me, and I learned a lot about myself by doing this. I felt so good about myself every time I didn’t buy something! I felt successful when I gave myself a limit and I stayed within that limit. I didn’t even feel deprived! When I was spending $25K a month, on the other hand, I never felt successful or fulfilled. I always needed more, more, more.

So, set your own limit for yourself. Take this amount out of your 70% living-expense budget. It may be 1-2% of your income. It does NOT need to be a large number! I was making six figures, and my fun budget was $100. If I can do it, so can you!

Okay, are you ready for your homework this week in your Budgeting Bootcamp?

1. Create your own budget using the formula you learned today. (Hint: Use your highlighted bank statement from last week!)
2. Leave a comment below, letting me know you have completed your budget.
3. Leave a comment with your #1 question about budgeting, sticking to a budget, etc.
4. Share this link on Facebook. You have friends and family members who desperately need of some financial help, and you can be the awesome person who helps them find the answers and solutions they need!

I can’t wait to see who completes their homework! Be sure to check back next week for the third step in your Budgeting Bootcamp!

In great faith,

P.S. Like what you read here? Just hit the “SHARE” or “TWEET” button below! That will help your friends and followers find this message!