Introduction to the Budget Club
Step One

First we need to set three goals. There's no point in starting a trip if you don't know where you are going! Your first goal is going to be choosing a bill to pay off. You may not be able to pay it off by the time the challenge is over, but you will be able to set a date for when you want it paid off. I want you to go through your list of debts and find your credit card or loan with the highest interest rate. This is the bill we are going to work on paying off. Once you have the bill I want you to use this calculator to help you decide how long it will take you to pay it off. You can plug in different numbers to see how different payments will affect the length of time it takes to pay the debt off. For instance, if you have a credit card with $2000 on it, your interest rate is 18% and you pay $50 a month, you will pay it off in 61months. If you pay just $10 more a month it will be paid off in 46 months! Write down how much you owe on the bill, how much you will pay monthly and the date when the bill will be paid off.

Our next goal is a pleasant one. I want you to pick something that you want to buy for yourself. It could be a new dining room set or a vacation. This is what we will be saving for. In order to make our savings goal you need to know how much it will cost and how long you have to save. For instance, if you are saving for a week at the beach in June and it will cost you $600, you will need to save $100 a month, since it is January. Write down your goal, how much it costs, when you want to have the money saved and how much you need to save each month in order to meet your goal.

Our third goal is going to be the same for everyone, long term savings. Your long term savings could be for retirement or for educational purposes for your children. Everyone will have a different amount that they would like to have in the future, but for general purposes we will be setting a goal of saving 10% of your income to go to long term savings. Calculate how much you should be saving each month according to your income. For instance if you make $1000 a month, you should be saving $100 each month. Write down your monthly long term savings goal.

Now I want you to draw a picture of the three goals, about the size of a credit card, and cut it out. Tape the picture onto your credit card, make copies if you have more than one, and in your checkbook. These pictures will serve as reminders when you are shopping so you can stay motivated to meet your goals!

Part of the Womens-Finance Budget Challenge!