Develop a Budget

5 STEPS FOR STARTING A BUDGET

STEP #1

Determine Your Current Monthly Income Level

· Determine your total monthly income. Be sure to include all sources such as Social Security, alimony, disability, child support, unemployment.

STEP #2

Make two written commitments

· First, commit to live on your monthly income.

· Second, commit to incurring no new debt.

STEP #3

Prioritize essential needs

· Housing, food, transportation, and medical expenses should take top priority.

· Stop discretionary spending on things like entertainment, manicures, or vacations.

· Don’t stop giving “first fruits” to the Lord.

STEP #4

Delay nonessential expenses

• For example, put off buying clothes, giving gifts, or making home improvements.

STEP #5

Analyze monthly subscriptions

• These are adjustments that may be temporary or permanent. • Include such things as magazines, gym memberships, cell phones, and cable television

This is a great start! You have your essential expenses. Now list all your debt, credit cards and loans. List them by interest rates, highest to lowest. After paying your essential expenses you want to pay minimums on all debt. Then go back and pay additional on the highest interest rate debt first working your way down to the lowest. A dollar extra counts here. Commit yourself to being debt free!