Budgeting is not always easy.
The process can be simple and understood by anyone, but implementing and sticking with it is very hard.
This is especially true if the numbers are tight in your budget.
Many people working on paying down their debt believe they have to turn all their attention to paying creditors, even at the expense of their households.
That’s not true, and it’s definitely not right.
There are four categories that should always have top priority in your budget.
These are the “walls” of your budget structure.
And your goal every month is to make sure you have these covered before allocating money to anything else.
They are: housing, food, transportation, and basic clothing.
#1 Housing Expenses – you need a safe place for you and your family to live. Mortgage and rent payments are often the largest item in a family’s budget.
And don’t forget the utilities!
You may be able to live for a while without electricity or water, but not for long. And it won’t take much time at all before it starts to impact other areas of life…. like your children, or your job situation.
#2 Food – You can’t NOT eat. You need food and water to survive. This is an area you cannot neglect but it’s also an area where most of us overspend.
If what you’re spending on food is within 9% to 14% of your income, you’re on par with most Americans.
When you’re first starting out, guess the amount for your food budget. But after a month or two, you’ll have a better idea of what your needs and wants are if you keep track.
#3 Transportation – you need to get to work and your kids that need to get to school if there is no school bus available. Transportation isn’t optional. This includes the cost of gas and, if you don’t own a car, cost for bus or train fares. Being able to get to work, the grocery store, doctor’s visits, etc. is important.
#4 Basic Clothing – this tends to be a rather flexible category, but still an important one. If you have kids you know that they either ruin or out-grow clothes on a regular basis!
You and any other adults in the house also need to make sure you have appropriate clothes for work and other situations. Even with an extended life, at some point, you’ll need to replace some clothes.
The four walls are your basic necessities.
By maintaining them, you stabilize your situation so you can begin to find a margin in your budget to attack your debt.
If money comes up short at the end of the month, something other than these four areas should get cut.
Things like…….. brand-name clothes, fancy restaurants, and even the expensive cable package.
And, if possible, sell one of your cars. But keep up with your necessities.
Remember this: your creditors don’t care about you. They just want to get your money.
So focus on the important over the urgent. And that starts with taking care of your Four Walls first.
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Until next time…..
Agree or disagree? I love your comments! Please let me know your thoughts in the comment section below.
I look forward to hearing from you!!!
Althea
Helping God’s people realize and achieve their true financial potential, become debt-free, build wealth and give generously!!
PS. Financially, most of us know what to do; we just have trouble doing it. That’s where a coach can help. CONTACT ME for a FREE 15-minute consult.
