If you know me, you know I love budgets. Like, borderline obsessive about it. My spreadsheets are  simple works of art, delivering powerful, functional information that helps me get a handle on our daily spending and overall financial picture for the month. I can easily say that, without our budget, we would not have a home, my wife would not be a stay-at-home mom, and we’d most likely be BROKE. Now, before we jump into the details of getting your budget started, let’s talk about the basics.

Your Priority Filter

Over the years, I have learned that I can’t simply adopt someone else’s style of budgeting, because that person does not necessarily have the same life priorities as I do. While I do like having a solid structure to layout my financial plan with, I prefer foundational principles that guide my financial choices rather than hard and fast rules. I have realized that if you truly want to have your budget be a tool that frees you to live the life you want to live, you need to start with a list of priorities. Mine looks something like this:

1. God
2. Wife
3. Kids
4. Family
5. Friends
6. Church
7. Other Stuff

Now, this is definitely not an all-inclusive list of priorities, but it does lay the basic foundation of how I would like to manage my life. They say that if you truly want to know someone’s priorities, just take a look at their checkbook (or credit card statement, these days) and their calendar. I want my checkbook and calendar to reflect the above priorities accurately, however, I often find that what I say my priorities are, are not necessarily lived out in reality. I find that I spend too much money on “Other Stuff”, or spend too much time with friends and not with my wife. Having a good list of life priorities can help me keep my finances in line with what is most important to me.

Start with writing out a list of priorities that you want to be reflected in your life. I know this does not explain how you are going to pay all of your bills, pay off debt and build wealth, but trust me, having these priorities in place will give you a clear direction for how to make every money decision you come across. Think of these priorities as a filter for your money. If all of your cash was falling form the sky, your money would be absorbed on the way down by these things, and you want your top priorities to be the first place your money touches before falling down to the next category. As your money filters down, less and less of it will go to the lower priorities, until you reach zero.

For example; I tithe my money as soon as the money become available, and then the rest goes toward necessities (at the moment). This reflects my financial priorities accurately, and helps me see that my money is going more toward my priorities, and less toward “other stuff” that is not as important to me.

Get It On Paper

I suggest taking a little time to sit down and write down your priorities before making a budget. This will give you some direction and allow you to make financial decisions on your budget that reflect your values and priorities. This list only needs to be a handful of things, and may not be the only priority list you make, but it’s a great starting point. Once you have a priority list, write down where your money currently goes. I have counseled a handful of people through this and know that this may take a little while, and can actually be pretty emotional, but it’s worth it to write down where every dollar has gone over the past month or two. This will give you an accurate view of your money, and allow you to compare your spending vs. your priorities. You may find that you are wasting a lot of money on things that don’t even make your list.

The foundation has now been laid. CONGRATS! I hope you have found this information helpful. Feel free to subscribe to this blog using the simple email form on the right. I will be continuing this series on budgeting and hope to have you along for the ride. In Part 2, we will discuss Tracking Your Income and Expenses.

Comments: What are your priorities? If you have not put your income and expenses on paper, what’s stopping you? Are your priorities and your money in sync?  Also, how do I get rid of all these dandelions in my grass? Seriously, these things are killing me…