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Budgeting Plan for 2021 With 5 Simple Steps

The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article does not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.

Why Create a Budgeting Plan?


“Oh here we go - Steve is gonna tell me stop drinking Starbucks or cancel my Netflix subscription or stop having a fun life...gosh Steve I don’t even know why I watch your videos.”

Okay hold on, we will not tell you what to do but this article will provide a step by step guide on how to take control of your finances with a budgeting plan that matches your goals.

Budgeting is not about sucking the fun out of your life. As the famous Dave Ramsey says, “budgeting is about telling your money where to go instead of wondering where it went.”

At Call to Leap we're here to help you work your way towards financial freedom. So our budgeting plan is not about saving a few bucks every month. It’s about your long term goals and focusing on all the details of your finances.

How to make a Budgeting Plan

Okay, so the best way to budget is to be as thorough as possible about all of your finances. So first, let's write everything down and map out your plan. Take out a piece of paper and follow these steps.

1. Goals

Write down your goals. Maybe you want to pay off your parent’s mortgage, or maybe you want to achieve financial freedom in 7 years. Or maybe you just want to stop living paycheck to paycheck and be “cash flow positive” for once in your life.

Whatever your goals are, write them down. Be specific as possible. Write down your…

  • 3 month Goals

  • 1 year Goals

  • 3 year Goals

  • 5 year Goals

  • 10 year Goals

  • Retirement Goals

And If you are young, don’t let that stop you from planning your future. The earlier you start taking control of your finances, the better!

When you’re writing down your goals, have fun with it. Create a road-map, draw pictures, and truly envision what you want to accomplish!

2. Income Assessment

Next, assess what your monthly after-tax income looks like. If your income fluctuates throughout the year use the average number of the past 3 months to give you the best idea.

With all of these steps, be sure that you are as detailed as possible. Account for side hustles and any extra forms of income.


Salary: 4,000 / month

Dividends: $50 / month

Side hustle: $200 / month


Total Monthly income: $4,250 / month

3. Expense Assessment

Okay, this is where the nitty-gritty details begin.

Go through your bank statements. Usually, these are accessible online through your bank.

When looking through your bank statements you may find old subscriptions that are no longer useful to you. You might even find some hidden fees that you didn’t even know you were paying every month. Use this opportunity to take time and cancel any unneeded monthly payments.

Once you have cut out any unnecessary recurring payments, check your bank statements for your recurring expenses and write them down. These will include things like your car payment, insurance, phone bill, utilities, rent, gas, Netflix subscription, etc.

Be as thorough as possible when you are writing everything down!

So when you write these down, it should look something like this:

Recurring bills:

Car: $120

Gas: $100

Groceries: $200

Phone: $50

Entertainment: $150

Dining out: $100

Gym: $30

Utilities: $200

Insurance: $200

Rent: $1000


Total: $ 2,150

What if your monthly expenses exceed your Income?

If your monthly expenses exceed your income then you are cash flow negative, which is the opposite of what you want and this is bad.

**Cue the “Oh no” song from Tik-Tok**

If you are cash flow negative, then you have two options. And it is best to do these options simultaneously.

You either:

  1. Increase your monthly income.

  2. Decrease your monthly expenses.

If you need to increase your monthly income there are many different ways you can do this. You can start a side hustle, get a second job, or start a business. There are many different ways to do this. Remember, keep your goals in mind. Even if you were not cash flow negative, it's always a good idea to increase your monthly income through whatever way you choose.

If you want to decrease your monthly expenses you will need to assess what you can cut out of your monthly payments.

Another way you can manage your expenses is through the Jar Budget Method.

T. Harv Eker’s Jar Budget Method

The Jar Budget Method is a method that T. Harv Eker introduces in his book, Secrets of the Millionaire Mind. Harv Eker shares this method to teach people how to make a monthly budget.

This method is basically a plan that divides your expenses into 6 different “jars.” These jars don’t need to be actual jars but the idea is to assign all of your expenses to categories.

The Jar Method includes the following 6 categories:

  1. 55% - Necessities

  2. 10% - Savings

  3. 10% - Play

  4. 10% - Education

  5. 10% - Financial( Investments)

  6. 5% - Give

You don’t need to follow all of these exactly how Harv Eker designed them. But the idea is to categorize your expenses. This will help you decide what you can eliminate from what you really need to be purchasing throughout the month.

4. Document Your Budget

So at this point, you have assessed all that you are working with. You have a clear idea of what finances are going in and out of your life.

Now it’s time to create a way to track your finances every month. There are several methods you can choose.

Mobile Apps

The first is mobile apps. Some mobile apps you can use to document your spending and budgeting include:

  1. Personal Capital (The Dave Ramsey budget calculator)

These apps allow you to connect your bank account so you can track your spending and create a budget online. You can play around with these different apps and see which one works best for you.


Another popular method is to use a spreadsheet on Google Drive or Microsoft Excel.

This would be a good idea if you want to use the Jar Budget Method because you can use a spreadsheet to document your expenses in different categories.

5. Course Correcting

They say that when Apollo 13 had its journey to the moon, it was actually off course 97% percent of the time.

Maybe this number is a fact and maybe it is not. But there is still a profound lesson in this analogy…

Sticking to your budgeting plan may not always be easy. Especially if we are talking about long term goals. And whenever you have a goal, you are bound to get off track. You are human after all. But as long as you keep the end destination in mind and you adjust your course along the way, then eventually you will get there.

Alright. That’s pretty much it on how to create the best budgeting plan for 2021. Remember to write down your goals, have an income assessment, have an expense assessment, document your budget, and check in to see if you’re on course.

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