4 Step Financial Refresh: How to Start a Budget You Can Acutally Stick To

4 Steps to Start your new financial journey! An actionable plan to make a budget that actually works!!
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4 Steps to Start your new financial journey! An actionable plan to make a budget that actually works!!The mountains of trash that accompany the Christmas festivities have been hauled to the curb.

The new toys have found homes on the shelves.

The suitcases have been unpacked.

It’s time to return to real life.

Laundry, dishes, school, and oh yeah, the budget.

The new year brings a desire to detox.  We want to dump all those old habits and mistakes that weigh us down physically (I’m looking at you Gingerbread Loaf), emotionally (no more stressing about the little things), and yes, financially!

It’s a time to reset the compass, adjust the sails and chart a new course.

After hearing from many of the Martha, Martha readers that their number one stressor in life is finances, I’ve decided to add a regular category on the subject of money.

Click here to read our money story.

How To Give Your Money Management a Refresh for the New Year

One of the best things we ever did for our money was one of the most time consuming.  It takes commitment and dedication, but it’s actually the easy part.  The hard part is seeing where the changes need to happen, being honest with yourself about why you aren’t managing your money well, and actually changing the habits.  It’s almost impossible to create a workable budget if you don’t know where your money goes so the first step is to see where your money went.

Step ONE: Gather the Info and Set Aside the TIME to Work

It’s a good idea to set aside a full weekend for your money refresh (preferably together with your spouse).

I know that’s not as fun as other weekend plans, but it’s no more time than you’d spend on a DIY Pinterest Project and this will have an even better impact on your life than freshly painted kitchen cabinets…I think…freshly painted kitchen cabinets are pretty dreamy and budgets are kinda boring…  Stay with me here people!  We can do this!

Prepare for your Money Refresh by locating all your spending and income records from the past year.  Print them out.  Yes, it takes a lot of paper, but it makes it easier to cross through things and keep track of what you’ve done and how much further you need to go.

4 Steps to Start your new financial journey! An actionable plan to make a budget that actually works!!

Step One and a half: Make It Fun!

I like to make our Money Refresh Planning Day as hygge as possible. (If you don’t know what hygge is yet, there’s a post coming up on Friday to tell you all about it!  It’s another new theme here at Martha, Martha!)

Put on some coffee or tea.

Bake some cookies to enjoy while you work.

Take a break and enjoy a favorite lunch together.

Use colored pens or markers and easel paper for a more creative feel to this very left-brained task.

Get dressed, look professional and cute so you feel more alert.  This is gonna like something out of a 1950’s housewife magazine, but I’m serious, your husband will be a little more forgiving of your spending splurge if you look your cutest while talking about it.  And you’ll feel more inspired to change in the future if you are dressed and ready to take on a challenge.  Schleppy clothes and sloppy hair will make you feel disorganized, overwhelmed, and can contribute to the “Failure” feeling that you’ll feel tempted to fall into.

Step Two: Use Past Spending Habits to Plan for Future Success.

When we first started budgeting, we assigned amounts to different categories based on what we thought we spent on those things.  When we began using the Freedom Account method, that was the first time we actually looked back over a full year and considered what we actually had spent on those things.  We pulled our bank and credit card statements from the past year and categorized every transaction.  I’m not gonna lie, this took almost an entire day, but it’s SO worth it!

One of the most surprising areas of change was in our pets’ budget.  I thought, “I take the dog to the vet about once a year, and it’s about $80.  I get dog food at the grocery store so it just comes out of our grocery budget.”  Based on that estimate, we needed to budget about $7 a month for the dog’s vet bill.  We looked over the year, at the actual vet bills, the cost of medicine, and included their food in the budget, the amount was DRASTICALLY different.

We now budget….brace yourself….$100 per month for our dogs’ expenses!

Even if you don’t have pets, the point here is that what I would have budgeted based on my recollection, what I thought we spent, was SO SO SO different that what it actually was.  We would have never been able to stick to that budget.

Let me repeat that.

We would have never been able to stick to that budget.

How many of you have thrown your hands in the air and exclaimed, “We’ll never be able to stick to a budget!”

You can’t stick to a budget that is based on dreams and feelings.  It must be based on fact.

Assign every transaction, including income, to a category and tally the totals.

If you are so inclined, you can find software to do this for you. I’ve found it just as tedious to try to select the right software and figure out how to do it as it is to do it manually.  (If you’re one of those techy, mathy people who uses software to keep up with the budget, let me know your favorites in the comments!)

Step Three: Determine Where Cuts Need to Be Made

Since you added all your income sources in the previous step, you know how much you made.  You may have a salary that remains constant or one that fluctuates, but seeing an annual amount gives you a good starting point to work with.  Divide that number by 12 to determine the amount you should be budgeting each month.

(In future posts, we’ll talk more about budgeting with fluctuating income, how to handle it when all your bills are due during one pay period and building up funds to cover those expenses before they come.)

If you’re good, your income will exceed your expenses.  If you’re like most Americans, it will not.  Sadly, debt has become the norm for most of us.  We’re not aiming to be normal though, we’re aiming to be good steward of our resources.

Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.  -Romans 13: 7-8 ESV

“Get out of debt” ranks right up there with “lose weight” as one of the top New Year’s Resolutions. It’s an excellent goal!  But a goal without a plan is just a wish.

Now that you know the actual amounts of your spending and income, you can determine if you need to cut spending or increase income and by what amount.  Over the next few months, I’ll be sharing strategies on how to do both, but I’d love to hear in the comments if your family needs to cut spending or increase income.  Which is more essential right now?

How do you know? Well, if you’ve already cut as much as you can fathom, if your grocery budget is at a minimum and you’ve shut off Netflix, then you probably need to increase your income.  If you’re going out to eat, tossing whatever you want in the grocery cart (and often tossing those same groceries in the garbage can weeks later), then you probably need to cut spending.

Step Four: Creating a Budget that Actually Works!

I highly recommend reading the Peaceful Mom’s blog on the Freedom Account method.  In the next few weeks, I’ll be sharing details of how we manage our money, how we keep with the budget!  Be sure to subscribe to the newsletter so you’ll know when they are posted.  The newsletter is my roundup of the best articles I’ve found online as well as my own content, so you can be sure you’ll find some fantastic solutions to your money woes, as well as homemaking, bible study, and more!


These first steps will get you started with a clear vision for where you are coming from and a great insight for where you can go!

This will be the year when you can finally get a grasp on your financial situation.  Your debts may take longer than a year to pay off, and your goals may take longer to achieve, but the first step is creating a plan that you can actually stick with.  It’s the hardest part, and the most important.

I’m right here with you guys!  We are going to do this together, with a firm reliance on God’s grace and direction to lead us.

Heavenly Father,

We humble ourselves before you.  We know that all our plans are worthless without your blessing.  Please help us to see your plan for our finances.  Help us to resist temptations. Let us find satisfaction in you and not look for it in material things. Bless our marriages as we work together with our spouses in this area. Give us diligence and peace as we work to correct our financial mistakes and plan for a future that honors you with our resources.  

Lord, forgive our mistakes and bless us with faith and vision for a financial plan that glorifies you above all else.  You are our Provider! Thank you for all that you have blessed us with. 

In His Name,



  1. I *highly* recommend a software called YNAB (You Need A Budget). Even if you don’t use their software they have tons of free resources on their website that explain their money method. It’s slightly different than, say, Dave Ramsey but it works because they encourage you to prioritize and be flexible. And only budget money you currently have not money you think you’ll get. (Disclaimer: I currently work for them but loved their method before I got the job which is why I looked for a job with them.)

    1. I’ve tried YNAB and was very impressed! For whatever reason, we do best with a pencil and paper method, but we like that YNAB would allow us to view her budget from our phones too!

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