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Budget Bootcamp: 3-Step Action Plan To Take Control Of Your Finances

We often talk about developing a vision for your life...and we're focusing on your FINANCIAL vision. When you weigh your spending against your priorities – for YOUR life – chances are you'll make different choices. So, let's solidify a plan for YOUR money!

Take a minute right now to check your email Inbox. Now, glance at the subject lines of those emails. Here’s what my Inbox looks like – just in the last few hours:

  • “Perfect for you…New arrivals!”
  • “Take an extra 20% off sale items”
  • “The Big Fall Sale (storewide starting at $8) Starts TODAY”
  • “Last day to get your free…”
  • “It’s your lucky day! BOGO – 40% off”

Look how easy it is to get sucked in! Then, BAM! Some marketer’s vision for your money has over-written your own. Or maybe impulse shopping isn’t an issue for you. You’re saying, “No, Dani. I unsubscribe from all those emails.”

Okay… what about your grocery bill? Or your morning Starbucks run? The big question is: Are you where you want to be, financially?

Here at, we often talk about developing a vision for your life. And, our greatest joy comes from equipping you with all the tools you need to design the life you want to live. So today, let’s focus on your financial vision.

We’re going to move from point A – where you are right now – to point B – where you want to go – by creating a budget. I know, I know. Budget seems like a dirty word. It feels like a bunch of restrictions and controls. It means you don’t get to have any fun or spend money on the things you want.

Step 1: STOP Thinking Of Your Budget As A Prison

Instead of seeing your budget as a prison, think of budgeting as a powerful tool. Your budget gives you the FREEDOM to reach your financial, business, personal, relationship and even health goals.

Once you create your budget and stick to it, it will amaze you how free you feel to do the things that truly matter to you. In the beginning, it may be difficult. You have to break some old habits and mindsets.

But a verse I’ve been talking about all year long, Isaiah 43:18-19 says, “Forget the former things; do not dwell on the past. See, I am doing a new thing! Now it springs up; do you not perceive it? I am making a way in the wilderness and streams in the wasteland.”

It’s time to say goodbye to those old habits, and establish new financial habits designed specifically to help you reach those wonderful, exciting, big, amazing goals you have!

So, what are those goals? What does success look like for you? For me, success is not owing a single red cent to anyone. Success is harmony in my home and great relationships with my husband and my children. Success is traveling the world.

[RELATED: Not sure what your dream is? Develop a tailor-made vision for your life!]

You get to determine those things for YOURSELF! What dreams do you have for your life? Where do you want to live? What do you want to do? Now, weigh that vision and those goals with your current spending habits.

Is your $5 latte worth it? Is that new pair of shoes worth it? Is buying your kids brand-name clothing so they look cool, worth it? Is the burden of debt and worry, worth it?

When you weigh your spending against those priorities, chances are you will make different choices. You now have a plan and a vision to build wealth. Now, let’s solidify that plan for your money.

Step 2: Identify Your Current Habits

To let go of the old, we have to bring those habits into the light. So let’s figure out your OLD financial habits, together. And you might discover some financial decisions you’ve been making… without even realizing it.

First, grab a piece of paper, a pen, some highlighters and your financial statements. Make a list of the bare minimum you need to survive: housing, transportation and food. Then, find out where your money actually goes each month. And I mean every red cent! Start by highlighting every single expenditure:

  • Yellow: Food
  • Pink: Debt payments
  • Blue: Necessities (rent, utilities, water)
  • Purple: Gas for your car or other transportation costs
  • Orange: Everything else (Yep…EVERYTHING!)

When you’re done, your statement will look like a rainbow. Add up the expenses in each category to see the totals. Then, go through each category and figure out what is a TRUE necessity and what is a “luxury.”

Be careful, because it’s easy to label a luxury a necessity. Let’s look at food, for example. The $5 coffee – is it a necessity or a luxury?

Eating out (fast food, the deli, a restaurant) – necessity or luxury? Picking up something for lunch because you forgot to pack a lunch for work – necessity or luxury?

It’s easy to get caught-up in the emotional aspect of this. Maybe you don’t want to admit you spend $300 a month on fast food, or $500 a month shopping online. The numbers you see might shock you.

Maybe you’re ashamed. It’s okay. As you go through this exercise, I want you to momentarily separate yourself from your bank statement. Consider examining it as if it belonged to a total stranger. Getting through this initial exercise may be hard, but it sets the stage for your financial future. As soon as you figure out where you’re starting, you will see what habits need to change. You are making way for your new life!

Add up the expenses for real necessities. Everything else is “fat” in your budget. This is the extra money you spend on foolish things. Here’s where all your hard-earned cash goes! And, THIS is where you will find the money to:

  • Annihilate your debt
  • Take your dream vacation
  • Pay for your kids’ college
  • Build a home in Nicaragua for a family in need
  • OR…anything else your heart desires!

Remember when I said budgeting is a way to help you reach your goals? This is why! You’re building habits that finally grant you financial freedom. You’re rejecting the stress and pressure of living paycheck-to-paycheck.

3. Build Your Budget

You will need four main categories to divide your money into, as you build your budget. This formula is adapted from Hans Johnsons’ True Wealth Formula.

Giving: 10%

Tons of people out there promise to tell you “secrets” on how to succeed and make more money. But the biggest secret I can give you – which helped my husband and me to succeed in business and build true wealth – is so simple, yet so POWERFUL. Ready? It’s just one thing: Giving!

Money is an incredibly powerful tool. It can provide food to someone who’s hungry, shelter to someone who’s homeless, and take care of those who cannot care for themselves. It all comes down to this – you will reap what you sow.

Like it or not, certain laws of wealth DO affect our money, whether we have a little or a LOT. But, the wealthiest people in the world follow these laws. And giving represents a BIG one!

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

If you want more in-depth information about the Laws of Wealth, click here. And, if your priority is ensuring every cent you give is used responsibly and goes directly to those in need, check out King’s Ransom Foundation.

Savings: 10%

Part of the problem we have in this nation (and around the world) is our skewed concept of saving. We seem to think “saving” simply means holding money back for a rainy day. Let me tell ya, your savings are not meant to be spent! You’re not saving for a new flat-screen TV, shopping spree or new car.

Saving does not mean “saving to spend.” It means SAVING! It might help to put that money into an account you can’t easily access.

The reality is, life happens. Houses flood, cars break down, people lose jobs and medical emergencies happen. As much as we’d like to think those things will never happen to us – they will. And when you don’t plan ahead, to prepare for the bumps in the road of life, you can get into trouble… FAST! Your savings should be money set aside for true emergencies.

Debt/Investing: 10%

If you have debt – credit card, car, mortgage, student loans, medical, etc. – devote a FULL 10% of your budget exclusively to paying off that debt. There’s a formula, right here, to help you pay down your debt as quickly as possible.

[Note: get on the fast-track and pay-off all your debt in five to seven years by making this War On Debt 10-Step Battle Plan your first investment.]

If you’re already debt-free, here’s 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 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%. Learn little tips and tricks to allow you to spend less… whether it’s at the grocery store, on your electric bill or cutting out unnecessary expenses.

THIS is why separating luxuries from necessities so important! Luxuries can so easily eat up the remaining 70% of your income, leaving nothing to cover your necessities.

So once you add up all your necessities from Step 2 and put them into this category, you may have some extra money left. DO NOT start sneaking those luxuries back into your budget!

Any leftover money you have, goes right into the DEBT category. For instance, if you live 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 start building your wealth – through savings and investments! This is the fun part!

You’ll find it exhilarating, confidence-building and freeing to pay-off debt. It’s exciting to invest and see your money grow. You will feel better about yourself each time you choose to not spend money foolishly.

And that, my friend, is freedom! If you want more information about building wealth, everything I’ve learned about success is in my book, “First Steps To Wealth” and you can get the book for FREE right here.

Budgeting is a lifelong journey and I want to hear about your journey! I’d love to know about all your tips for saving money, the debt you’ve paid off, and all the dreams you’ve fulfilled. So, please leave us a comment on Facebook and share YOUR story of financial freedom!

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