---
title: 'How to Make a Budget That Actually Works for You'
source: 'https://youtube.com/watch?v=FUA_hirrEV8'
video_id: 'FUA_hirrEV8'
date: 2026-06-30
duration_sec: 1400
---

# How to Make a Budget That Actually Works for You

> Source: [How to Make a Budget That Actually Works for You](https://youtube.com/watch?v=FUA_hirrEV8)

## Summary

Rachel Cruze explains how to create a budget that actually works, emphasizing that a budget gives freedom rather than restricting it. She covers the zero-based budgeting method, the importance of tracking expenses, and how to handle irregular income, featuring a couple who successfully budgeted despite income fluctuations.

### Key Points

- **Budgeting Basics** [00:00] — 60% of Americans don't budget; a budget gives permission to spend and provides freedom.
- **Baby Steps Overview** [01:16] — Seven steps: $1,000 emergency fund, pay off debt (except house) via debt snowball, 3-6 months expenses, 15% retirement, kids' college, pay off house early, build wealth and be generous.
- **Getting Spouse on Board** [02:16] — Nerds (budget lovers) should tell free spirits that a budget gives freedom, not limits. Use grace and visual numbers to convince.
- **Zero-Based Budget** [05:25] — Monthly income minus all expenses equals zero. Every dollar is assigned a category. Use past 3 months to estimate spending.
- **EveryDollar App** [07:08] — Budgeting app that connects to bank accounts, auto-categorizes transactions, and does math. Free with Financial Peace University.
- **Handling Irregular Income** [08:14] — Plan ahead, use a miscellaneous category, and build a buffer. It takes about 90 days to get a budget working.
- **Overcoming Budget Defeat** [10:15] — If budget feels defeating, it may reveal income or lifestyle problems. Adjust spending to live within means.
- **Couple's Success Story** [12:09] — Sarah and Corey struggled with inconsistent income (up to $7,000/month variation). They used the 14-day money finder, EveryDollar, and tracked expenses to gain control and peace.

## Transcript

Did you know 60% of Americans don't budget? It's time to fix that. So in this episode, we're gonna talk about how to make a budget work for you. All right, it's 2020. I cannot believe it.
The start of a new year. Now remember, I shot some of these videos before I went on maternity leave. So yes, I am still pregnant. But when you look back and reflect over the last year, I don't know about you, but it flew by.
And I feel like I didn't get everything done last year, I wanted to get done. So to start out 2020, I want us to all start out with the bang and hit the ground running. So if you're like most people, you're trying to get your money in order.
So in this episode, we're gonna go back to the basics. I'm gonna show you how to create a budget that actually works for you. And I'm gonna bring a couple on to talk about how they budget on an irregular income,
which is a huge problem for a lot of people. Now when you look at people's top new year's resolutions, paying off debt and saving money is always at the top. And here's the good news. We have a proven plan to help you achieve those goals.
So if you follow our plan at all, you probably are familiar with the baby steps, but those of you that are not familiar, there are seven steps that you do in order with your money. So really quickly, baby step one
is a starter $1,000 emergency fund. Baby step two is paying off all of your debt, but your house using the debt snowball. Baby step three is saving three to six months, worth of expenses, a huge emergency fund.
Baby step four is saving 15% of your income into retirement. Baby step five is funding kids college. Baby step six is paying off the house early. And then baby step seven is building wealth
and being extremely generous. So those steps in that order. Now it can seem overwhelming, but again, you just start with the first baby step, but the beautiful thing is no matter where you are on the baby steps,
you have got two budgets. All right, the budget is great. The budget is awesome.
I love the budgets. And you maybe watching this video and you're thinking, yes, I agree with you, Rachel. But my spouse, I have to get them on board. Listen, I get that. Because Winston actually had to get me on board
to do the budgets. Because here's the thing, you marry your opposite and so Winston in our relationship is actually the nerd. He's the one that loves doing the budget. He loves to be organized. He loves details.
He can like get in it and analyze it and he loves it. And I'm more of the free spirit. Where I'm like, listen, it's all gonna work out. Let's just have some fun. And I'm a spender on top of that. So I'm like, yeah, we'll just go, it's gonna be fine.
Don't worry about it. So that, that's all good and dandy. When you're on a budget and you have boundaries and restrictions and you're mature and you like take it seriously, which I am now. But 10 years ago, that was not always the case.
And so getting your spouse on board is huge. So let me just stay out there for all of you nerds that are watching this video. And again, you nerds love doing the budget. So I'm not worried about you doing the budget
because you're probably already budgeting. But when you're talking to your free spirit, couple of things to remember. Tell them that a budget does not limit their freedom. A budget gives them freedom.
In fact, a budget gives you permission to spend. And you actually get to say, hey, this is where we want to spend our money because you get to create your budget. You get to decide, where do you want your money to go? And so that's the beautiful thing.
Now, will there be sacrifices and boundaries and limits involved? Possibly, yes, depending on where you are financially. But when the free spirit sees the numbers down on paper or visually wherever that is, it's going to help them see it
and tell them, hey, we're gonna have a lot of grace in this conversation because you nerds out there watching. I'm sorry, sometimes you're just big real followers. And you don't give us a lot of grace. And so you have to chill, nerds, chill a little bit
and tell your free spirit, listen, this is not gonna be a perfect process but let's work on it together. So free spirits and nerds unite. It's a beautiful thing when it happens. And it is possible, I'm telling you, it is. All right, coming up next.
Let's talk about how to actually do a budget. Family is one of the most important parts of my life. And making sure everyone is taken care of
is a top priority. That includes more than just meal planning, entertaining the kids, and taking care of all the day-to-day needs. That's why I recommend having life insurance. Now when you're shopping for it, you might wonder,
should I get term life insurance or whole life insurance? I always recommend term insurance. It's going to save you tons of money that you can put towards paying off your debt and funding your emergency fund.
For a 30-year-old male, a 20-year, $250,000 policy would cost just $15 a month for term life. However, the same policy for whole life would be $190 per month.
That is a huge difference. Winston and I use zander insurance. They do all the work for you by finding you the best prices and options customized to your needs. To learn more, call zander today or go to zander.com
because that's who we trust to take care of our family. All right, a simple budget you guys. This is all it is. You ready for this? Fifth grade math. Your monthly income, minus all of your expenses,
should equal zero. So every dollar coming in is assigned to a category. Now, that's easier said than done, okay, because here's the deal. There's a lot of moving parts, and if you've never done a budget before,
it's going to be very, very overwhelming. So the first thing you have to do is figure out what do you make a month. Some people, it's different every month. So we'll talk about that later on in the episode. But for most of you, it's like, okay, yeah, here's your salary.
You know exactly what you're going to make. So dig in and figure it out after taxes. This is take home pay. What are you bringing in the door every month? Figure out the number. And then you're going to list out all of your expenses.
So this is everything from rent or your mortgage to food, groceries, restaurants, your cell phone, your insurance, pet care. I mean, anything that you spend money on listed out and then put dollar amounts like see each of those categories.
Now your first month doing a budget, go back and look the last like three months and just kind of average out, okay, here's kind of what we're spending on food. Here's kind of what, you know, this is what our insurance payment looks like. Just get a ballpark to at least get some numbers down.
And then what you may realize is wow, we're spending a lot of money because we have not been purposeful, which means you're going to adjust some of those categories, which is totally fine for that first month. But again, your goal is that income minus all the expenses,
all the expenses, what equals zero. Every dollar has a name, okay? And so stick with this because every month is going to look different. So I'm telling you, you have to put it though visually somewhere. This can be on a sheet of paper or you could use every dollar,
which is our budgeting app. And it's amazing. Seriously, I love every dollar, every dollar plus connects to your bank account. So when you swipe your debit card, automatically those transactions come in the app
and you can drag and drop them into the correct categories. Or if you're taking cash out of the bank, then that'll come up and you'll be like, okay, yes. You know, $200 went to food here and you can break it out. And oh, it's, it is like, I'm telling you as a free spirit.
Even though I'm a free spirit, it's one of the most satisfying things in the world. When you see that little bubble pop up on the every dollar app and you get to drag and drop. And it does the math for you. Then it starts subtracting for the categories. You want to do the math. I mean, it is unbelievable.
It will change your budgeting game. So download every dollar, do your first budget. The great thing is here at Ramsey Solutions, we have solutions for you. We help you. So even within the app, we have so much there to talk about how to do the budget.
So dig in there, look and see because this is huge. Now, a budget can get complicated because there are a lot of problems that people come up with. So one problem I hear a lot is, well Rachel, every month is different. So I really can't plan ahead.
I'm sorry. Yes, it is different. Welcome to the world. Yes, everyone's month is different guys like that is life. And so what you do is you do the best you can. You look ahead and say, okay, we're going on vacation.
So we're going to put Nala or our dog, you know, at the vet for seven days. How much does that kind of cost? We'll put that in every dollar. I mean, you have to actually take the time and intentionally look ahead. Now, are there things that are going to come up throughout the month that you forget about?
Yes. That's why we have a miscellaneous category. Your niece's birthday comes up and you forgot. And it's a princess tea party and you need a gift. Thank you, miscellaneous categories put it in there, right?
I mean, like, it's all there for you. That's your catch all, okay? Now, if you notice that your catch all things keeping the same thing, that means you need a budget for those. That needs to be its own category then. So it's going to take some time, but yes, you have to plan ahead.
And if it's your first time budgeting, it's going to take 90 days for your budget to work. Give yourself some grace. Figure out what your months look like and just say, okay, this is what we're doing. Now another problem I see is that people that are living paycheck to paycheck
and they're using their credit cards to pay for bills may not have enough money and their bank account to plan for the month ahead. So this is going to take a mindset shift, okay? If this is you, because you've been functioning in the past.
You've been functioning of saying, okay, I'm paying bills on things that have already happened in the past. But what you have to do is you have to be thinking ahead, which means yes, you are going to have to have some money in the bank in order to live this way. Because you're basically living a month ahead.
So when your paycheck comes on the 31st or the 1st, take that amount and say, okay, this is what I have until my next paycheck and cash flow as much as possible. And maybe you take a month between now and doing your first budget and just save as much as you can to have some buffer there.
Now, if you find that you cannot get ahead financially, then you're going to look and say, okay, maybe I have an income problem versus a budgeting problem and you may have to get your income up, which is really hard. But in the moment, it's going to be so worth it because you're able to function that month ahead by doing the zero-based budgets.
Another problem I see people have is that a budget is just defeating, like doing a budget. It's just so hard every single month. And I do see people with this because it's a draining process because they're not making progress.
It's like a budget is not exciting and fun because what it is, it's revealing the problems that they have. And so the problem maybe that their income is too low or their lifestyle is just too high. And so there's going to have to be some adjustment there.
It's kind of this reality check is what a budget is for some people where they say, wow, we really have been living way beyond our means. And so we're going to have to be uncomfortable for a while and sacrifice our lifestyle things. We're not used to sacrificing in order to get this correct because listen, we're not in Congress.
It's like we can't just keep spending money. You guys, we have an income is set income every single month, each of us does. And you have to budget within that. And that's how you're going to get ahead financially. You will never be able to live above your means and win over the long term.
It's just not going to happen. And so it's a hard reality that I'm telling you. Once you get the budget under control and you say, wow, our income is absolutely funding the lifestyle that we have now. Then you start to gain traction, you start to gain control.
A budget isn't easy. I'll be the first to admit it. It can be really hard. But the beautiful thing is the more you do it and the more consistent you are, it becomes a habit. In me, I can't believe I'm saying it, but 10 years after doing a budget consistently, the free spirit, I don't know what I would do without a budget.
I'm not going to lie to you. My bank account did not connect to every dollar for about two days, two days ago. And I could not track transactions. And I was like, I don't know what's happening. I don't know what's happening. That would never have been me 10 years ago, you guys.
That's me doing a budget every single month. It becomes a part of who you are. And there's such safety in it. I'm telling you, the best way to get it head financially is to be intentional. Alright, coming up next is a couple who had a tough time with budgeting.
But they stuck with it and they're going to share their inspiring story. I felt trapped. Like I had no say in where our money was going.
I mean, I just felt kind of oblivious. And we get toward the end of the month and I'd be like, why do we only have 100 bucks in our bank account? I've always been a budget conscious. I've always been aware of the finances. I've always sort of managed the finances.
It was easier to just do it and not talk about it and avoid any potential fight. So it was just manage it and move on. I was just finally so fed up and we had started communicating better about it.
I think we both knew that a change had to be made. But I think it was a little more reluctant. It's not that I didn't want to budget or to make a difference. It's just like, at the time I really didn't think it was necessary.
Once we both got on the same track, it really sort of opened the door for us. Our income can vary up to $7,000 a month and that's crazy to try to manage. You can't just say what's my annual gross and divided by 12 and then live that way. It just doesn't work.
With our inconsistent income, it felt like we can't do anything about it this month. We can't. We don't have the income so we're going to charge it and then we're going to deal with it when the income comes in. It took us a few months to figure it out and I mean the whole budget was completely crazy.
Like it was not even close to where it needed to be. I had no concept of what we were spending where. But we didn't add to death that month and that was such a huge win for month one. Once you change your mindset or you're even your collective mindset and you really look at this as like not that you're losing something but that you're gaining something much bigger which is like this piece of mind.
It's a complete game changer. Now that we're budgeting, I really feel more in control. It's done wonders for our relationship and for our pocketbook too. Even though we have an inconsistent income, I feel free. I feel like I have control over where my money is going and it honestly feels like we have more money to spend because we're telling our money where to go.
Thank you guys so much for coming on. Really appreciate it. So when we talk about budgeting, it is a tough topic anyways but you add inconsistent income on top of it and it's really difficult isn't it?
Really difficult. Yes. So I'm in that boat. You guys are in that boat so let's talk about it. Yeah. You guys started budgeting so I'm curious just what made you start budgeting in general? So we've always been aware of how we should handle our money but our most recent get serious moment just came from looking at the numbers and being like we're done.
We're not, we're going to buckle down on this again and we're going to make it happen. Yes. Because we've been debt-free but then it all came back. It came back. And so you looked and you said okay we're done.
We have to get out again and the budget is like the main tool to help you do it. So when you started budgeting again did you feel the freedom come? Not at first. It's hard at first you fall into the normal traps of well with my income I can't make this budget because this month is a slow month
but I don't even have enough for the four walls. But if you look big picture and after a few months it started to fall into place. Yes. Okay so what was the biggest hurdle would you say when it comes to having an income and budgeting?
I mean it's all like the big changes that have to come like all the small you know no coffee trips in the morning. Just like all the small little lifestyle changes they tend to be a little annoying at first.
And then but I mean I think when you really start to work at it as like a team and focus and be like hey we're doing this together this is you know we're making all these big changes now so that we can make bigger cooler awesome changes later on
and just get our family in a more financially healthy position. Totally yes. So when you started budgeting and you realize okay then it's a real thing. Members are changing every month we don't know how to predict it and it's hard.
How many months would you say it took to kind of get a footing kind of get your groove. I would say probably about three. And I don't think we could have done it if we didn't like have all of the resources that we had
and supportive people around us to help us do it. So what resources were those what did you choose? Well we started with your 14 day challenge. Oh yes the 14 day money finder. And that gave us enough to create like a little bump.
So that was great getting us rolling and then we got the every dollar app got it upgraded and that has been super useful because before that I was literally writing down everything
like writing it down from our basic and it was ridiculous. Yeah it's hard right. And you see the convenience of like oh this app has been so great. Yes so I know for I can speak for Winston and myself because we do this
and it's like some months you're like oh man it's just lower than you're expecting you have to go in. Change the numbers. Some months it's bigger and you're like oh that's nice. Yeah. You like those months. So do you still feel that that you have to change it month to month because of not just life changes
within your expenses but also because of your inconsistent income. Yeah. I definitely think we make we have to make a lot of changes and be very aware of not just like what is in this month but what do we have like three or four months down the road
that we have to prepare for. So yeah and with the income fluctuating it's it's a challenge. So tell so people that are watching you know I'm okay so how are you doing this. What would you say? Like what are your tips like you look and say I'm going to just project as close as I can
if what I think we're going to make here and we know is coming. Because sometimes we have freelance jobs or commissions that we know we're going to come in at certain times and so those are projected out.
And then I look forward on the assumption of okay there will be more. There will be stuff that we don't know of yet. You know so it's more of like saying these are the things that are necessary.
These are the things that come next. If it comes in and if not we roll them to next month. And then these are the things that come after that. And we're in baby step two. So then everything else goes to debt. Yes. So the things that are necessary.
Yeah I'm watching it's what we call the 4 walls you mentioned that earlier. So food, shelter utilities and transportation. But some months still it's not even enough for the 4 walls. It's important that I have that the little bit of bump already in our checking account
so that I'm not going all the way back into our emergency fund or something in the event that we have a slow month. Yeah I think that's a great point because on those slower months you have to be able to make sure your bills are paid. You have to have that cushion so on the months that are good.
Yeah. Setting some of that money aside and making sure you have that cushion is such a pro tip. So good. So good. So someone watching they've never budgeted before. Oh. And they're thinking okay how do we get started? Maybe they do freelance work.
I mean their income is so inconsistent. Like what's the number one thing you would say you have to do this? Track your expenses. Because when you see where your money's going, you change where your money's going.
Like when you see that you're spending too much money at Chick-fil-A every month. Yeah. You heard the heart of Sarah. You heard the heart of always Chick-fil-A. Yes. You say okay we need to make Chick-fil-A an occasion situation and not a convenient situation.
Or you say okay I need to start making my coffee at home instead of stopping at the gas station or the Starbucks every day. It's liberating to have this feeling of control over what like with all of the...
The income that we just don't know, there's just this feeling of helplessness sometimes. Especially when you get in those low months and just being able to grab some of that control back and being like, this is not going to change my mood.
I'm not going to, you know, we're not going to argue over money. Like, you know, understanding that you're not telling me that I can't have coffee in the morning. You're just like showing me that $2 every couple of days, you know, 52 weeks out of the year.
That adds up to a lot of money over time. And seeing that I've been doing it for four or five years, I'm like, oh shoot, that's a vacation at the end of the day. Or, you know, something important that we need to buy, school supplies, whatever.
But I mean, it's got to be a team, it's got to be a team effort. I love that. And there's usually one spouse that's not always on board. I get that question all the time. How do I get my spouse on board? Yeah. And you did one of the things I always tell the spouse that is on board usually the nerd.
To do though, is to run the numbers and like to visually be able to see that this is what's happening. So would you say that that helped you a ton? For sure. 100%. I mean, being able to see the numbers, and they may have done some floating and stuff like that.
But like, when you see the colors help, you know, you should put, you know, deficits in red. I understand colors, you know, as an illustrator artist, I'm like, this makes sense to me. And there's a lot more red on here than there is green.
So that's, you know, I would say in those, those three months of getting lined up, getting on the same page was a big part of that. Yes. And so how has that changed your marriage in general? It's so much more peaceful.
I mean, everybody fights about money. It's the number one, what marital dispute is money. Yeah. So, I mean, that's, that's been huge. Yeah. And the achievements are our achievements. Their wins together and that feels good.
I love that. I'm working towards a goal. And it sounds kind of cheesy, like set a goal together. But truly, when you are and you hit it, it's like, we did that. Yeah, we did that as a team. Yeah. Oh, you guys, you are like, it is, it's amazing.
It's amazing. Just seeing people that stick to the plan, they do it, persevere, even when it's hard. And there's months that it's like, what in the heck are we doing? We stick with it because at the end of the day, you're getting that piece, you're getting that control. And ultimately, you guys together have a stronger marriage because of it.
So you're like a living testimony to it. It's really amazing. Seriously, thank you so much for coming on. It was our pleasure. It's like, it's just filled with hope and you're doing exactly what you should be doing. I love it.
And I'm glad you're getting the wins. That's the best part. Yay. All right, you guys, we mentioned it like eight times in there, but it's true. Every dollar plus, if you've not checked out that app, make sure you do that. Now, if you sign up for Financial Peace University, you actually get the app for free.
So make sure you do that because it's going to help your budgeting journey be so much smoother. Man, I love that Sarah and Corey stuck with it and got their money under control.
And they figured out how to make their budget work. Now, if you have an irregular or inconsistent income, I have a worksheet in the show notes. I'll help you budget for it. Now, don't forget to subscribe to the show and to my podcast, just search the Rachel Crucio.
I hope you guys found this episode helpful because once you get budgeting down, everything else works so much better. As always, remember, take control of your money and create a life you love.