---

Before we even begin to compare incoming funds to outgoing money, we’re going to establish a few priorities. What absolutely must be included in the budget, every month? This will completely depend on the goals & lifestyle of each individual family. For example, most people would say “I can’t afford private school.” while it goes to the top of our list. (On the surface? We “can’t afford” it either. It’s all about what’s important to you and your family.)

Take yesterday’s budget worksheets & a pen, then star all mandatory payments—I’m talking absolute necessities like water & electricity. No, cable is not mandatory. I promise. It might be a priority for you, but we’re getting to that. Next, rank the rest of your payments & expenses, in order of importance to your family. You aren’t making any decisions to shut off the cable or stop dining out—at this stage, you’re just putting them in order so you’ll know where to focus your efforts as we go.

Finally, highlight your top 3 expenses. This can help you identify problem areas in your budget—expenses that may be out of line with your finances or areas that have room for improvement. You can also compare them to national averages or IRS standards, for what it’s worth. Sometimes, it helps to see where averages fall—again, to identify areas you may be spending too much or have a little room to save.

But, we’re still not making those choices—this is a one-day-at-a-time, step by step process. We’re breaking it way down, and this will be enough for now. You’re thinking about the amount of money you spend, prioritizing your expenses and will start putting it all together as the series progresses.

---

I’m not a financial planner or a budget expert. I’ll just be walking you through the steps I take each time my budget needs an adjustment. In fact, I’ll be participating myself!