As you start to master your finances, it is important that we put the essential things FIRST and make sure they are paid each month – what’s left is what we will use later to work on paying off our debt.
What are Essentials?
Okay, I know you are thinking – What do you mean by essentials? Very good questions! Essentials are those things that we NEED to pay each month just to live day to day without sacrificing your basic needs:
- A Place to Live (your home)
- Food to live on
- Basic Utilities (heat & electricity)
Entertainment and dining out are NOT essentials but are excellent tools to used to help you celebrate when you reach your goals. So, once you have your essentials down and know what you need to meet this portion of your budget – go ahead and celebrate. Treat yourself to a Dunkin coffee and donuts, you will have earned it.
List Your Household Essentials FIRST and their Status
So its is time to list out your essentials followed by a (C) if they are current, then the amount you need to pay each month in the second column labeled “Budget”. Here is a list of essential categories which may or may not apply to your situation.
- Utilities (OIL, GAS, ELECTRIC, PROPANE)
- Car Loan / Transportation
These are the true necessities you have to pay to meet your basic needs. Many things we spend money on are pure luxury items to make us feel good. Personally, I will feel the best when my debt is paid.
Are You Current on These Essentials
Now that you have a list of essentials you must pay each month to meet your basic needs, have you placed a (C) next to those you are current on – hopefully all. In the next column, write how much you owe each month or need to pay in order to bring the item’s current. If they are already current, you will just put your monthly payment or an estimate.
Then tally up your budget column to see how much of you need from your paycheck to satisfy this area of your budget.
That Wasn’t so Bad Now, Was It?
I hope this helps you see where I focus first when preparing for the new month ahead. Download Simplified Budget Worksheet. Your categories may be different – using this worksheet put together your essentials. If you are not current on a particular item, add what you need to bring it current to your normal monthly payment. You will start to see your new monthly budget coming together
Interested to get your feedback and opinions on this article. Did it help you get started? Do you have any suggestions?