A budget is not the second thing you need
You’ve been tracking your spending now for over a month. Have you recorded all of it? Even the credit card spending? Yes, you need to pay attention to that too. After all, you’re still paying for it. In fact, if you’re carrying a balance on your card, your paying more for it that you otherwise would.
Still, you’re not ready for a budget yet. Now, you need to know your goals- and not just your money goals. We’re talking about all your life goals, because guess what, they pretty much all cost money.
So write down all your goals. If you have a significant other, have them write down all of their goals. Then, get together and prioritize.
However, priority may not go to the most important goal, like retiring early, or being able to send the kids to any college they want. Besides importance, you also need to consider your current ability to meet the goal. Working on something where you never feel like you’re making progress gets pretty discouraging fast.
So when setting your priorities, make sure you give yourself some quick wins, and put an early focus on items you have the most control over.
If you have credit card debt, your first goal might be to stop using the card, then to pay extra on minimums- something where you can see results more quickly.
So keep tracking your spending, and decide on your goals. Then you’ll finally be ready to create your first personal budget.
[…] just wants to cheat and point you to my earlier posts A Budget is NOT the First Thing You Need, A Budget is Not the Second Thing You Need, and Creating a Crash Budget. But I don’t think that really falls in to the spirit of what I am […]