The big four when it comes to budgeting are your house note, your car note, your grocery  and credit card bills. When I sit with people to go over their finances, the first thing I want to look at are how much money they are spending on the big four. Let me give you a simple example of how this works.

Let’s say that you and your husband take home $3,700 a month. Your house note is $1,050. Your car note is $450 a month. You are spending $400 a month for food. Your credit card bill is $100 a month. Your big four total up to $2,000 a month. Your big four represents over 54% of your net income.

If you don’t have a lot of other bills, you are in good shape financially. Let’s pick another couple with the same income. Their big four adds up to $2,100 a month. They also have to pay out $500 a month for child care. After subtracting utilities, car insurance, gas for their car, life insurance, cable, phone, Internet, medical bills not covered by insurance and student loans, they are barely getting by.

Unfortunately, too many people let one, two or more of the big four get the best of them. When they finally consider their other finances and the effect the big four have on their finances, it may take them a couple of years or more to reverse their situation. If you would like to see how to save money on some of your big four or put together a budget,  call me at 313-744-5977 or e-mail me at [email protected]. If you need individual help in budgeting and want to get your budgeting book for free, ask how you can do this.