Financial planning starts with a blueprint, er, budget

Trying to come up with an effective, lifetime financial plan without putting together a budget first is a little like drawing a complete set of blueprints for a new house and not including any doors. You'll have a nice place to live, if you can just find a way to get inside.

Financial planning involves all aspects of using money to plot your personal economic future. It includes tax planning, insurance, investments, building a fund for college expenses, and retirement accounts. But it also includes a good, basic budgeting plan.

A budget, the dictionary tells us, is a plan for the coordination of resources and expenditures - not spending more than we take in.

''Budgeting is a form of planning,'' says Philip Cooper, a financial planner in Boston. ''It's part of the long-range planning process that lets you turn a little into a lot.''

A good budget, he says, should not only help you save money, it should help impose discipline to ''keep you from buying what you can't afford.'' It should also keep you from getting over your head in debt through, for instance, unwise use of credit cards.

Even going without a credit card does not have to mean budgeting becomes a process of pinching pennies, telling yourself ''no'' every time you want something, and checking columns of figures every day.

One way to begin preparing a budget is to look at all sources of income and figure out how much money you have coming in. Many people think this is nothing more than take-home pay from their job. But you can also include interest from bank accounts, credit union savings, and investments. Do not include money you expect to receive but don't have, such as a raise, a year-end bonus, or cash gifts.

Now that you know what you are receiving, it's time to look at what you're spending. Some financial planners do this by breaking down spending into three categories:

1. Necessary and fixed expenditures, including mortgage or rent payments, insurance premiums, taxes, and payments on installment loans.

2. Necessary but variable expenditures, including food, clothing, some utility bills like telephone and electricity, school and college expenses, gasoline, and personal care.

3. ''Luxuries,'' including entertainment, restaurants, vacations, boats, subscriptions, recreational vehicles, gifts and donations, and investments.

While many people consider some of the ''luxuries'' to be ''necessities,'' the fact is, you can live without them. And getting more control over the first two categories will leave you more money for the third.

Now, make a list of the items and amounts for everything in the first two categories. You can use various records from the past year or so, including tax forms, canceled checks, and bill receipts. (You do save canceled checks and bill receipts, don't you?)

After you've added everything up, subtract spending from income. You may discover that you have been spending money unnecessarily without realizing it, and could have more funds left over for luxuries than you thought. You simply have been spending for the luxuries before taking care of necessities. On the other hand, you might find that expenses outweigh income. In either case, it's time to make some changes in the way you manage your money.

Now is the time to get your family together and decide on financial goals and what kind of life style you want to lead. If you can all decide on a common set of goals and living patterns, you'll find it easier to work toward them. For many families, just getting priorities in order, taking care of necessities first, and making adjustments in life style and spending patterns are all that's needed.

You may also want to start finding ways to spend less for what you need. Do more comparison shopping, looking for the lowest price and best quality; find the best places and times to shop; and scan the newspapers for sales. If you see something on sale that you don't have to have now but will need later, buy it now if you can.

On some disposable items, you can stock up when a store is having a sale. We know one man who waits for his neighborhood grocery store's annual sale on canned goods. He comes home with several cases of beans, corn, peaches, pears, applesauce, and other products. The colorful cans fill shelves in kitchen cupboards, hall closets, and in the basement. While his family is amused, he's counting his extra change.

As for savings, many people need some kind of system to help them put some money aside regularly. At around 5 percent, Americans have one of the lowest savings rates in the industrialized world.

One system involves starting with the smallest percentage you think can be saved every month. If it is 5 percent, write 5 percent of your take-home pay on a piece of paper. Do the same with 6, 7, 8, 9, and 10 percent. When you get paid , pay yourself some savings first.