Our Financial Fitness Goal is living without credit cards, loans of any kind. We want to feel comfortable living within our means and end the feeling like we are living paycheck to paycheck.
Finding your Financial Budget Form is like buying a new pair of tennis shoes. You don't commit to buying it unless it looks good and is the right fit for you. If you are unsure of a Financial Budget Form that could fit you, check out my previous blog post, Finding a Budget Form If one of these forms are not the right fit for you, you can find other budget forms on Pinterest.
But now that we have our "new pair of shoes." It is now time to look at what type of workout we are going to do? Walk? Run? Zumba? P90X? The workout you choose has to be whatever you can financially afford and what you are willing to give up. If you want to get out of debt quick, it may mean sacrificing a lot of "extras." If you feel like there just isn't much to give up, then getting out might feel like a walking pace.
No matter if you choose to walk or run, IT IS POSSIBLE TO LOSE THAT FINANCIAL WEIGHT!
Let talk about how to create a budget. This is part is hard. I am not going to lie. This will give you a wake-up call of how financially unfit you really are.
With your budget form, Write down your income.Then, we start with the MUST HAVES. These are the items that are not negotiable. These are the items, for the most part with few exceptions, that are a fixed price. The cost will not change much.
With your budget form, Write down your income.Then, we start with the MUST HAVES. These are the items that are not negotiable. These are the items, for the most part with few exceptions, that are a fixed price. The cost will not change much.
- Mortgage/rent
- Electric/Propane
- Water/Trash
- Insurance
- Car Payment(s)
- Daycare
Next, let's move to the next items that we use to live, but prices can vary. We can upgrade or downgrade if we need too.
- Cable
- Internet
- Phone Home/Cell
- Gas for Transportation
Write down how much each one costs per month. Even if you only pay it quarterly, what would you pay per month? Subtract those costs from your income.
Debt is next. Ugh! Here we want to write down the bare minimum payment of your debt broken down. Do not clump credits together or student loan payment. Separate them out. For example, I have one student loan payment. But when I look at my summary, I probably have 15 loans that are being paid on in that one payment. I will explain in a future post as to why I do this.
Write down how much each one costs per month. Even if you only pay it quarterly, what would you pay per month? Subtract those costs from your income.
FINALLY, the leftover money! Yahoo! This money you can mix around a bit and decide how you want to spend it.
Are you spending more than what you are a making right now? If not, good! You are sitting pretty good. But if you are, take a look at how much you are spending and cut how much you are spending in some of your negotiable categories or completely eliminate them altogether.
We are not done quite yet. We have one more category, and that is the Overage. The Overage is the amount you are going to put towards your debt so you can eliminate your debt quicker. Obviously the more you put toward your debt, the quicker you can get out of debt. Maybe this overage is $50. You will put this $50 towards the one debt that is the smallest debt. Here we are going to do the Snowball Effect.
Remember, our goal is to live within our means and to completely eliminate the use of credit cards.
Debt is next. Ugh! Here we want to write down the bare minimum payment of your debt broken down. Do not clump credits together or student loan payment. Separate them out. For example, I have one student loan payment. But when I look at my summary, I probably have 15 loans that are being paid on in that one payment. I will explain in a future post as to why I do this.
- Credit Card 1
- Credit Card 2
- Credit Card 3
- Credit Card 4
- Student Loan 1
- Student Loan 2
- Student Loan 3
- Etc.
Write down how much each one costs per month. Even if you only pay it quarterly, what would you pay per month? Subtract those costs from your income.
FINALLY, the leftover money! Yahoo! This money you can mix around a bit and decide how you want to spend it.
- Savings
- Giving
- Groceries
- Fast Food
- Entertainment
- Doctor Visits
- Membership Fees
- Toiletries
- Personal Money- His
- Personal Money- Hers
- Home Repairs
- Car Repairs
- Buffer Money (The money for things when they unexpectedly pop up)
- ETC.
Are you spending more than what you are a making right now? If not, good! You are sitting pretty good. But if you are, take a look at how much you are spending and cut how much you are spending in some of your negotiable categories or completely eliminate them altogether.
We are not done quite yet. We have one more category, and that is the Overage. The Overage is the amount you are going to put towards your debt so you can eliminate your debt quicker. Obviously the more you put toward your debt, the quicker you can get out of debt. Maybe this overage is $50. You will put this $50 towards the one debt that is the smallest debt. Here we are going to do the Snowball Effect.
Remember, our goal is to live within our means and to completely eliminate the use of credit cards.
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