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Frugal Fridays - Making a plan

I am a planner. I function best with in a plan. So, it is with shame and embarrassment that I tell you we have no plan. Planning is the first step to debt reduction yet, we are not using a budget.

We used to use a budget. Then we moved and because my husbands new job was partially salary, partially commission we were not sure how much the income would be. Also, the cost of living here is different. And then there was this other excuse, and well you know this one too, and it has been a year and still no budget.

We have been operating under the "plan" of spend as little as possible, pay off debt as much as possible. A great broad statement, but it needs a little meat to it. We need a budget. I am hoping that writing this post out will give me some motivation to sit down and do it.

Where to start? A budget needs to be livable to work. If you use Quicken (or other software I assume also has this option) you can generate a budget based on your previous spending. This is a great place to start. You need to see where your money is going before you can make a plan to meet your financial goals.

You need to see where you need to adjust. Can you trim some off your entertainment? Do you need to set money aside for car expenses? (This is an area we have never planned well for) I think it is helpful to follow a guideline like this one at Crown Financial. Remember this is only a guide, it is not set in stone or the "right way" to spend your money. You have to decide what is important to your family. If becoming debt free is high on your list (as it is mine) then budget more for it, but you also have to decide where you are going to budget less or how to increase your income in order to pay more to debt.

I can't believe we have been with out a plan for a year. This really can't wait any longer. So, will you help me? Make me practice what I preach. Give me a few days and then start bugging me. We need to make a budget. Next Friday I will talk about how we will stick to that budget.

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Frugal Fridays - Making a plan + work