Saturday 11 July, 2020

4 simple steps to creating an effective budget

Personal Financial Strategist and founder of ThrivingDollars Kenishia Mais offers four simple steps to budgeting.

Personal Financial Strategist and founder of ThrivingDollars Kenishia Mais offers four simple steps to budgeting.

Your budget is the most fundamental part of your entire financial life. Nothing else works unless it does.

Unfortunately, budgeting often comes with the misconception that it is something you have to be innately good at, or you’re just never going to get it right. Neither of these is true.

Misconception aside, the truth is that budgeting is actually quite simple once you have the right strategy and it will also eventually become second nature with practice and repetition.

In today’s column, we will be focusing on the four simple steps in what I coined the LTEM Method to creating a budget that works for you.


Firstly, a significant part of creating an effective budget is knowing exactly how much you earn, followed by what your hard-earned money is spent on and exactly how much of it goes where. Create a list of your weekly, bi-weekly or monthly net income along with your estimated monthly expenditure. You may choose to do this in an excel spreadsheet or just with some old school pen and paper. Whatever you decide, ensure that you use the system that is the least complicated for you so it will be easier to maintain. In order to make your budget effective, you have to first make it simple.


Unless you are actively tracking how much of your money is going where, you won’t put yourself in the right position to improve your financial well-being. Begin to consistently track your expenditures until you know what the exact dollar amount is that you spend on each line item in your budget. This is pretty simple and shouldn’t take more than 5-10 minutes if you are recording it daily (which I highly recommend).

Actively tracking what and where you are spending on can also help you to easier realize whether or not you are living within or above your means, and if there are areas that you may need to start cutting back in.


What is your budget saying? Is your money going where you want it to go, or is it being directed towards creating everyone else’s wealth but your own? Take time at regular intervals to evaluate your budget and ensure that your income is being properly guided. Money follows the direction it is given and every single dollar you earn is always being told where to go and what to do, whether or not you are the one guiding them.

I recommend that you take a deep dive into your spending patterns each month and measure those against your major financial goals. Do a further in-depth analysis and course correction at least once each quarter. Ensure that you always pay keen attention to where and how your money is being spent.


If you want different results, you must take a different course of action. When you uncover areas in your budget that need improvement after your evaluations from step 3, you should now be willing to make the necessary adjustments. Your goal should never be to create or get the perfect budget, but instead, to get your budget as closely aligned with your personal goals as possible. As those change, so will your budget. Modification is an ongoing process and you will realize that as your financial mindset shifts, how you spend your money will shift as well.


About the author: Kenishia Mais is a Personal Financial Strategist and founder of ThrivingDollars. Having been at almost every end of the financial spectrum, she founded ThrivingDollars on the belief that with access to the right education and resources, everyone can develop the discipline to create their ideal financial. She can be reached via email at and on Twitter @KenishiaMais.

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