We’ve all done it! If only it multiplied down there. 🙂

You may be shocked when you do your budget for the first time and see how little you make compared to how much you plan to spend.   We were.  In fact, there was a 1500$ difference the first time.  Knowing that we were about to have a drop in income due to health issues made me weak at the knees.

If you are in this position, you may be momentarily terrified because you might just wonder how on earth you will make ends meet!  Rest assured that it is possible.  This is the whole reason for The Resilient Wallet – to use money so efficiently that we become financially secure and relaxed while living well and being kind to the planet and the people on it.

It took us four months to truly understand our budget and master the envelope system.  What delighted us was seeing that we actually could make our expenses lower than our income.  Once we did this, we were on our way to building financial security.

So, how did we do it?  The first step is to plan what you spend.  The second step is to spend wisely.

The Plan

1.    Establish Limits

If you are a couple, go through the categories together.  You are both smart people and you each have different ideas that can lead to success.  See where you think you can either delay purchases (not debt payments) or reduce amounts.  Commit to working within the limits you set.

2.    Shave off Small Amounts

The first time we did the budget, I felt a surge of fear when we saw that we needed an extra $1500 to see us through ONE month.  My gut reaction was that this would be impossible.  Then, I watched Peter shaving five dollars here and ten dollars there.   The first month was the most difficult.