After you pay for your fixed expenses, such as rent or mortgage, car payment and debt repayment, you have the variable expenses of food and 'life.' Life is shopping, allowances for the kids. Life is lunch money and taking the dog to the vet.

Those of us who have lost our financial way spend money on life first, and then whatever we have left over we use to try to pay our bills.

But if you will do the fixed expenses first, I would like you to set aside - in a place not easily accessible if need be - money for the foundation of the pyramid. And that is money set aside as an emergency savings account. After that, modestly spend money on food and the other desires that you can afford.

Also in this foundational bottom block of the pyramid start saving for retirement and pay off 'bad' debt. Bad debt is unsecured, typically credit card, debt. Add $5 extra per month, or $50, or some amount to one of the credit cards every month because it's not the size of the payment that matters. It is consistency that will pay this puppy off - all while not ADDING more debt.

Protection

You may stay in the foundation block for years, steadily paying off one credit card debt and then another, while adding to your retirement account and continuing to make contributions to your emergency savings account. That's just fine. Because slow and steady wins the race.

But once you feel like you can let that go and grab the next challenge, how about making sure you have the insurance you need in addition to what minimum that you have? And after unsecured debt is paid off, now you can begin to pay off 'good' debt, like your house.

Extra

After you have made such a solid foundation to your finances and life feels secure, the third block in the financial pyramid is to start saving for travel or a vacation home. What are your dreams? Now is the time to begin putting money aside for that next vision. Using an investment account to help you achieve those goals may be just what will get you there.

Feeling spoiled

Finally, wherever you are on the savings / wisdom trail, always use a small percent for fun. Life is work sometimes. And it is also most certainly a blessing. But it can also be hard. So make sure there is a small percentage used for fun you pay for - because as a frugal friend, you know there is plenty of fun that is free. Fun needs to be baked in to your plan. But vacation is only fun when you know you aren't robbing money that should be used for paying bills.

We aren't born knowing financial foundational truths, and learning where to start and how to prioritize takes time. I think this financial pyramid is a great help getting focused on a financially healthy new year!

Note:Only securities and advisory services offered through Wall Street Financial Group, Inc. Registered Investment Advisor. Member FINRA/SIPC. Wall Street Financial Group, Inc. and Norumbega Financial are separate entities, independently owned and operated. (CR11240)