STEPS FOR A SUCCESSFUL BUDGETING

What you do need is plenty of conversation as a couple to determine your personal and financial goals. With financial flexibility as the key to long-term happiness in the 21st century, how do you and your spouse want to live? You may, for example, choose to pursue the traditional American Dream of a big house, fancy car, and country-club membership. But through the planning and budgeting process, you’ll come to realize the trade-offs involved—and what you may not be able to achieve if you pursue your primary goals.

Before putting pencil to paper, explore the following questions with your spouse:

What kind of house will satisfy you?

Here are some questions to ask yourself as you think about your priorities:

■ Where does my family ft into the picture? (For example, do we have financial obligations, such as a child's
college tuition, that we have to account for?)
■ Is taking a second job an option (fnancially, emotionally)?
■ Is giving to charity or religious organizations important to me?
■ For my own peace of mind, how quickly do I want to be out of debt? What am I willing to sacrifce to get there?
■ What things that are important to me are affected by my debt, or might be affected by it if I do not remedy it? (These might include anything from not being able to join friends for dinner to having to postpone starting a family or losing your house.)
■ What goals do I have that might be attainable once I'm out of debt? (These could be anything from educating children to a comfortable retirement.)

As you think about your priorities, jot down the things that matter most to you - the things that have an impact on how and why you want to get out of debt.

Although the last several decades have brought financial turbulence, one constant remains: Your home likely will be the largest purchase you ever make. Thus, it goes without saying that you and your spouse should have detailed discussions about your housing plans.
There are options here. Some couples might prefer to spend less on a house and more on travel. Others plan to entertain frequently and likely will be spending most of their time at home. Or they may anticipate having relatives living with them, either permanently or for extended periods. Therefore, they want a spacious, well-appointed home.

These are vital issues for you to consider because they relate directly to your ability to reserve and allocate resources for your other lifetime goals. The bottom line on house selection is this: The more money you spend on your home, the less you’ll have for other objectives.

How will you get around locally?
We’re talking here about your transportation needs. How will you get from here to there? If the answer is by car, the transportation category could be the second most expensive in your budget.
Couples who live in major metropolitan areas with superior transit systems (such as New York City and Chicago) may be able to use public transportation to and from work, shopping, and recreation, renting cars only for those special travel occasions.

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