“More Power!!!” For Your Finances

 Do you remember the TV show “Home Improvement“? It ran from 1991 to 1999 on ABC and it starred Tim Allen as “Tim the Tool Man Taylor”. Tim had a TV show on home improvement, and one of his most famous lines was “More Power!!!” as he was always looking to add more power to a car, a home appliance, or a tool like a power drill. Typically this led to a lot of trouble but that never stopped Tim even against the good advice of his assistant Al.

Could you use a little more power with your finances? Of course you could! You would like to squeeze everything you could out of your monthly income. As my mom used to say, “you have to stretch that dollar!” (of course she would say it in Spanish: “hay que estirar el peso!“). So whether you have a great income, a moderate income, or you are struggling with a low income, we can all use some help in getting the most out of it. What you need is a power tool for your finances and the best power tool is a monthly budget or spending plan.

You might say, “I don’t know how to do that. I am not good with numbers.” or “I have tried it before and it did not work. I still don’t know where my money went.”. I would say this: you will never get your finances under control until you have a budget that works for you. I will promise you that if you learn how to do this and develop the habit of doing it every month, you will get your finances under control. Let me just walk you through the basics.

What do we mean by a budget?

We mean a zero-based budget which is simply:

  • Total Monthly Income – Total Monthly Expenses = $0

How do you put it together?

  • You start with two lists. The first list is your monthly income. Use the figure that represents your take home pay from all sources. You have to use the “take home” figure because that’s what you get home with and that is all you have available.
  • The second list is the list of monthly expenses such as food (both groceries and restaurant spending), utilities, mortgage/rent payments, insurance, clothing, transportation expenses, etc.
  • What you do is basically you “spend” all the money on the first list against the categories on the 2nd list on paper. You allocate an amount to each category (for example, $400 for food, $500 for utilities, etc.).
  • You are done with the budget preparation when the difference between the income and the expenses is exactly zero.
  • There are several tools available to help you This is the form we have used every month for the last 5 years for our own budget. It will work for you:

Why do it?

  • It will give you the control of deciding where your money goes instead of wondering where it went at the end of each month.
  • It will give you insights into which areas you might be overspending. These areas can then be adjusted as needed.
  • It will help you to learn how to live on less than you make.
  • It will give you and your spouse an objective way to discuss your finances. My wife and I no longer have money fights. We have discussions each month about what to do with our money.
  • It will give the required muscle to your monthly income to go as far as it can for your benefit.

Things to remember

  • Prepare a budget every month before the month begins. Every month is different in certain areas. You have two days before August ends so you still have plenty of time before September begins.
  • Discuss the budget with your spouse. One of you will prepare the budget (typically the detail-oriented person or the person who is the nerd in the house). In our house, that’s me. But, both of you have a vote and you both have to agree.
  • Live the budget. It does you no good if you don’t stay on plan. Keep track of your expenses. Adjust as needed. You may need more than one budget committee meeting with your spouse as you get started to make changes. That’s totally normal.
  • If you are single, find a trusted friend who will look over your budget and give you candid, honest, loving feedback. Pick someone who is actually winning with money.
  • Keep it simple! The nerd in the household might be tempted to come up with too many categories and a 17 tab excel spreadsheet. Resist that temptation!
  • Understand that it will take you a little time to get it right. With any new skill it takes time to master it. My estimate is that it will take you about 3 months of doing this to get it working. But it is completely worth it so stay with it!
“The plans of the diligent lead surely to advantage, But everyone who is hasty comes surely to poverty.”
Proverbs 21:5 (NASB)


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  1. Pingback: So Let It Be Written, So Let It Be Done – Help and Hope for Your Finances / Ayuda y Esperanza para Tus Finanzas

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