Start Your Budget

Goodday to you. So, you are on day 8 of your journey to becoming debt-free. How does it feel? Are you fully committed? Do you think it is impossible to start during the holiday season? Have you slipped up and used your credit card to buy gifts? Well, if you decide to wait until the holidays are over, that's OK, however you must commit to a maximum spending budget and try your very best not to go over no matter how challenging it may be. Absolutely no vacation planning on credit. If you plan on going on a vacation, first you need to secure a rainy day fund or an emergency budget, once that is in place then you can start saving for a vacation. To do this, you must have a clue as to your total monthly expenses. This is the very first step in formulating a budget.

Your assignment this week is to sit down and write out all your expenses for the month. Here is a sample list of items you might want to start with:

Tithe (If you are christian and tithing, this means 10% of your income - Mal 3:10)
Housing expenses (mortgage or rent)
Car Loan

Car Insurance

Gas

Food

Utilities

Student loans

Life Insurance

Other loans

Clothing

Gifts

Medical costs

Savings
Other

 

Once you have decided on this monthly amount, we will then move on to determine the monthly income. Then we will have some guidelines as to how much each expense should be relative to the income. (example: Food should never run more than 12% of your income, etc.)

 

By the way, if you are married this exercise is best done as a couple, two cannot walk unless they agree.