Remember last month’s post on The Budget Pie? Here is the first of three detailed posts about The Budget Pie and first up is The Past.
Why start with The Past? The Past is history … but it is history you are STILL paying for in the present and have to plan to pay for in the future. Why do you have a past to your budget pie? The past is anything you signed for using credit … your credit cards, that department store card, the student loans for that awesome degree you hopefully use and don’t wonder why you majored in years later, the car you drive and dinged in the parking garage the first week you got it, your house that love where it is but you kicked the dryer when it suddenly died on you … all of that is The Past. You have pay for it now because you used it then or you are stilling using it.
The good or some times bad thing about The Past portion of The Budget Pie is that the payments are fixed. Like a car payment or a mortgage or student loan, you have a set payment to pay it off. If you have credit card debt, you need to give yourself a set payment so you can pay it off and not keep it for 30+ years! This can be hard to do but there are often online tools that help determine amounts for paying off debt.
The Past isn’t a bad thing though. In today’s society, we need a credit history to do stuff like buy a house or a car. At the same time that credit history can bite you in the butt when you don’t watch it and nurture it like a second husband or another child or a stray cat that suddenly adopted you instead of you adopting it. It is there and you must care for it. Remember it is credit history that is part of The Past of your Budget Pie.
The nice thing about The Past in your Budget Pie is that you can work to change it. You can work to make it SMALLER. It should be a smaller part of your Budget Pie. You can be responsible with The Past portion of your Budget Pie. If you messed up and The Past portion is HUGE … not small … then you can work to not only make it smaller but learn a lesson to not let it be HUGE again.
All that being said, this isn’t a lecture that The Past of your Budget Pie is something you have decide on just like the rest of YOUR Budget Pie. The key to The Budget Pie is that you make it your own … all pieces of it, even the one that no one seems to like the taste of … The Past.
Now that we have The Past out of the way, watch for posts about The Future and The Present in the next two months!