Protecting Your Plate - Priority Based Budgeting

The play at the plate.  There's nothing more exciting in a baseball game. 

The batter drives the ball to the deepest part of the park.  The outfielder, momentarily confused by the bounce off the wall, finally corrals the ball, spies the runner trying to score from first and ... let's fly with everything he can muster to get the ball to home plate before the runner.

Now, focus on the catcher.  Second only to receiving the pitch, his most important job is to protect the plate.  Two things are on his mind:  catching the thrown ball and keeping the runner from scoring.  He wins if he does both -- and loses if he misses either.

Our personal finances are really much the same.  It's sooooo important, regardless of how much or little we make, to ensure we spend our income on what's most important to us -- before we allocate money to other things.   If you're drowning in debt, those decisions should definitely include taking care of priorities first:  Utilities, Mortgage or Rent, Groceries, Car Payment, Fuel and on down the list.  If you'd like help, here's a Priority Based Budget form you may use to plan your week / month.  Simply download it (it's a Microsoft Word doc; here's a pdf version if you don't have Word) and move (via cut and paste) to the top of your list your highest priority spending.  When you run out of money during the month ... draw a line and stop spending!  For example, if you make aggressive debt elimination a priority ahead of entertainment, cable, eating out, clothing, etc., then those categories will take a back seat and end up below the line.  Also, don't forget your giving (charitably).  If it's important to you, it will be up there at the top of the list and you'll find a way to make it happen.

If you're doing well (and out of debt except perhaps your home), the same strategy -- protecting your plate -- also applies to you.  At the top of your list (below the same priorities above) may be: building a larger emergency fund, investing, college savings, vacations, car replacement, retiring the mortgage early, etc.  Yes, Lori and I are sure we're funding our retirement well before we fund other things like vacations and car replacement.  We can't see eating out at IHOP if we're not saving well for our future.  Call us crazy, but ...

Just like the catch protecting the plate, you have two major focuses: 1) Maximizing your income (catching the ball) and 2) Prioritizing your spending (preventing the runner from scoring).  Do them both, and you're an All Star!  Consistently miss either, and you're out of the league. 

Protect Your Plate.