Budget Series: Step 1 - Making a financial plan that's right for you.

If you want the above printable click here to download. (My husband informed me that it was super girly. That is because I am a girl and I made the printable for my homemaking binder. However, if there is demand for a more manly one I am happy to oblige.)

Before making a budget, it is helpful to draw up a financial plan. Your plan can be as simple or as complicated as you would like. Having a financial plan allows you to determine what you want out of life. It helps you to set and prioritize more detailed goals.

A financial plan is not set in stone. It will adjust as your circumstances in life vary. When we first got married our undefined financial plan looked something like this:

-Graduate from college debt free
-Find jobs
-Build a savings
-Buy a home and start a family (not necessarily in that order)

 An ideal family plan should have short term (1-2 years), mid term (5-10 years), and long term (20+ years), goals.

Your short term goals should be the most specific. When we were in school our goal 1 could have been broken down into:

-get second jobs and/or take more shifts
-apply for scholarships
-budget and meal plan
-take as many credits per semester as possible to graduate sooner
-take a semester off if necessary to save up tuition

Etc.

Keep in mind that there are multiple ways to achieve a goal, and everyone's goals will be different. That's okay. This is why it is helpful to establish a general financial plan first and then break that down into more defined steps that will help you attain your broader goals.

Now, our financial plan looks more like this:

Short-mid term goals:

-Remain out of debt
-Maintain a small liquid emergency fund of $1,500.00
-Build a larger emergency fund of 6-12 months living expenses
-Save for the big things that are in our future so we can pay cash (ex: more babies, bigger car, down payment on home, etc.)
-Give at least 10% of our income to charity
-Take an awesome family vacation

Long term goals:

-Be able to retire comfortably
-Be able to fund our children's schooling, etc.
-Give more generously
-Provide scholarships for college hopefuls

Under the umbrella of each of these goals, we have a more detailed plan of how we want to accomplish them.

Every so often you should review your long term goals. Make sure that they are still what you want from your life.

After you complete your very general financial plan you will be more prepared to make a budget and more motivated to follow through and start reaching your goals.