Budget Priorities First To Last

Posted on by Forest in Budgeting, Debt, Saving Money & Finances

Budget Priorities First To Last

Budgeting is one of those things that everyone thinks they are doing ok but many people are not. Buying a magazine and a coffee could be $10 down the drain that could have paid off a bit extra on a credit card and only paying the minimum on debts or buying gourmet ready made food, as examples, could be lengthening your struggle.

I’m assuming that you are thinking of prioritising your budget because you are not holding things together very well. Everyone has things to juggle, even the super rich, so it doesn’t hurt for each and every one of us to individually work out what we should be doing with our money and what is most important.

How To Make Budget Priorities First To Last

The simplest way to look at it is things you have to pay should be first, things you should pay should be middle and things you don’t need or don’t have to pay should be last but that is far too general and I don’t know everyone’s individual finances so am going to give a mehod for sorting your first to last order.

1. Go to the dollar store and pick up some small cards, coloured or plain it doesn’t matter, and maybe some sticky tape or putty. Also grab a marker if you don’t have any laying around.

2. Get all your paper bills, insurance plans, subscription notifications and your statements and anything else and put them in a pile. If electronic then load up your computer and get them all up in documents or in the browser.

3. Start writing down everything you pay out on cards. You can pool some stuff together like “coffee” over the course of a month. Put each insurance, each credit card and loan payment, each charity donation and every single payment action onto it’s own card.

4. Once complete you have a jumble of payments but on the cards ready to organise. I would make a kind of hot to not hierarchy with the absolutes at the top and the not needed at the bottom. Take a long time on this organisation.

5. Now I think the list should be split into 3 lists. I would make a column of cards for things that have to absolutely be paid. This could be any debts that come knocking month on month, your rent of mortgage, utility bills etc etc. Make a 2nd pile for things you think or want to keep paying. This could be things like additional insurances, cable, Netflix, vegetable delivery etc etc. The third pile should be things you don’t need. Things like a soda every evening from the corner store, subscription to a magazine you never read etc etc.

6. Now you have 3 lists I would go over them again and make sure everything really is in the right pile, make sure that some can’t be merged or reduced in cost (like utilities for example) and refine the budget that way.

7. If there is space I would stick the budget cards to the fridge or a large cork board and also create a spreadsheet version using something like Google spreadsheets.

8. Revisit the budget and refine (add, take away, move columns) each and every month or more often if needed to keep the priorities in order and keep yourself motivated to stick to them.

What do you think of this plan? Will it work for you?