Sunday, March 6, 2011

Baby Step # 1: The Budget: How Are You Doing?

In my last post I talked about the first step in becoming debt free, The Household Budget.

Tonight I will be starting the first class in my 12 week Coupon class. To learn more you can read about that here.

The first topic will be the Budget. You can't get to where you are going, without a plan. You would never dream of hopping in your car, to travel to say, Florida, without directions. Whether you have a physical map or turn on your GPS, you still have a plan. The Household Budget is your plan for debt free living.

I hope you all started your spending log. You should have a weeks worth of spending habits to review. Be patient and gentle with yourself. This may be the first time you have attempted a budget. Remember perseverance is key here. By perseverance the snail reached the ark. It is important to be moving in the right direction. Congratulations, that is progress!

Hopefully you have identified some areas where you could tighten your belt. Let's look at a Sample Scenario:

Maybe you identified you purchased 2 convenience coffee's (I call them convenience coffees because let's face it, it is a convenience to purchase the coffee versus making it a home) at say Dunkin Donuts. You paid over $2 for a medium coffee. That's $4.

You also identified that you purchased (3 extra items) without a coupon that weren't on sale, when you made a quick trip(AKA Budget buster) to the grocery store. For an average of about $7. Some say that average is much higher.

While reviewing your spending log for the week, you noted that you ate out once. Whether that was a breakfast, lunch, Chinese or a Pizza, for about $15.00 Depending on your circumstances that might be higher or lower.

We have just found $26.00 Now with a little sacrifice and planning you could find $26.00 a week to add to your debt. If you spent $26.00 extra dollars a week for one month that would be $104/month. Now that's some working capital.

Some of you buy a convenience coffee every single day. That's $10/week $40 bucks a month.

I am not trying to say you can never buy a convenience coffee. What I am trying to say is if you are in debt, and can't pay your bills, and you desire to get out of debt and pay your bills on time, that there are ways to do that. They require sacrifice, changing your spending habits and sometimes just plain hard work. But I am here to tell you that those sacrifices are every bit worth it to reduce your debt and pay your bills on time. Reducing your debt and paying your bills on time are key ingredients in the recipe of a debt free life!

Now that you have some good insight to your spending habits. Write Out A Budget.There is power in the written word. God choose to speak to us through His written word .The Bible is a living book. There is power in the written word.

You can tell some one you have a degree in brain surgery, but without proof of a written diploma I wouldn't suit up in OR Scrubs right sway. You should put your budget in writing. You should have a clear cut plan to become debt free. In the beginning of our debt journey we weren't even sure how much we owed. Pathetic I know, but true. Keeping a written budget keeps you informed. A written budget, keeps you honest. Numbers don't lie. You must know what is coming in and what is going out. No magic. Just knowledge.

This journey is a process. A learning curve. Be patient, but start somewhere. Start today. Do something, even if the steps seem small. Remember these baby steps are the first steps.......... to big dreams!

I am praying for you,

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