78% of professional football players go bankrupt or are under financial stress within two years of retiring from the sport. If these “moneybags” aren’t able to stay afloat with their massive incomes, what hope does Joe Onepack have? The answer is “a lot of hope.” All he and you and the NFL players need to do is create a simple budget and stick to it.

Step 1: What Is Your Income?

Erin and I create a new budget every month. At first, it was difficult and involved a lot of guesswork, but now, it’s clockwork. We can complete a budget in about ten or fifteen minutes. You just gotta build up your budgeting muscles. The first step is to look at how much money you have coming in each month from work, social security, shady deals along the pier, etc.

For most of you who get regular weekly, bi-weekly, or monthly checks, this will be easy to figure out. If you work on commissions or are a freelancer, you may not know exactly how much you will make. If this is the case, always choose a low-ball estimate of your income. I look at my account and see what my lowest income was for the previous three months, and that is my estimate. It’s better to underestimate than overestimate.

Step 2: Assign a Use for Every Dollar

Before the month starts, you should know exactly where every dollar you earn is going. Here is what our budget looked like a couple years ago:

Please don’t judge us.

We go into pretty deep detail about where our money is going. You may not want to be so specific. We also break down when we will have the money available for each budget category. We found that to be helpful, but you may not want to go into such detail.

When creating your budget, first assign money to necessities (in order of importance): groceries, rent/mortgage, utilities, insurance, transportation, hygienic products, clothes/laundry, other bills, other expenses, paying extra on debts/mortgage principal, and savings. Make sure your total costs equal your income.

Additionally, you should have a plan for what you will do if you get extra income for some reason. For example, we will put the first $200 of extra income toward fun money, which we can use for whatever we want as a reward to ourselves for bringing in extra cash. If we earn more than $200 in additional funds, the rest will go toward paying off our debts. If you don’t have debt, then save it up!

Step 3: The Envelope System

You may have noticed in the above budget that we have a line that says “Envelope Total.” This is because the money above that row goes into our envelope system. This is an easy way to keep track of your spending. We put $500 in our grocery envelope over the course of the month. Once the money in that envelope is gone, we cannot spend any more on groceries: we have hit our budget limit. We try to use the envelope system for everything we can, but not everything fits into it. Also, you may have different categories or may combine categories. Every family is different.

This should get you started on your budget. Don’t get frustrated if you have trouble with it during the first few months. The Brainses still hit speed bumps, and we’ve been doing this for five years. As with anything, it takes practice. Also, I’m sure there are things I forgot to include, and you may have questions. Please post your comments and questions below. I also recommend reading Dave Ramsey’s The Total Money Makeover since I’ve pretty much learned everything I know about personal finance from him.