* * *
As the founder and editor of Better
Budgeting, my heart aches that so many people are still struggling with
money. We will continue to help in whatever small way we can, making a
difference in people's lives one article at a time.
I know many will argue that we just need more
jobs, and higher paying jobs... but I can also tell you, we are terrible
about budgeting our own money! This goes back to that old saying from Larry
Burkett...
There's a man who makes
$30,000 a year, one who makes $50,000 and another who makes $100,000 a
year. You'd think the second two would be doing great, huh?
Well, think again.
When asked how they're getting along, they all usually say the same
thing... "We're just barely making ends meet."
New jobs and more money would be great, but
if we don't get out of debt and start budgeting BETTER, it won't
matter much in the long run.
I wish, just as our schools should teach
marriage and parenting skills as a required class, that they would also
teach a full year of personal budgeting. And in a perfect world, credit
card companies would not approach anyone under the age of 21, maybe even 23…
at least not until they have several years of cash-basis living under
control.
Okay, so apparently that ship has
already sailed for most of us. And if you are in debt or living paycheck to
paycheck because of family illness, job loss, house repairs, car repairs, a
precious new mouth to feed, or any other financial difficulties… we’ve been
there too.
Some people think that anyone who is
struggling must be a poor money manager, but many of us know different.
Some of life's curves can knock us down pretty hard. I'm just saying, most
of us can do better.
I know that there are situations when no
amount of good budgeting seems to help, but when the clouds clear and things
get better, that basic budget that you’ve put in place will surely come in
handy.
No matter where you're at financially,
you can start a household budget and do your best to stick to it. However,
Better Budgeting has more to do with living than budgeting. What I mean is,
you can write everything down and fill out any budgeting chart you want, but
if you don’t live what you have set out on paper then it won't work.
I’ll give you a very small example.
Let’s say you look over your finances and decide that you have $50 a week to
spend on food, but you go out and spend another $30 on dinners out during
the week. What do you have? You’ve spent $80 instead of your $50 budgeted
expense, so now you’re $30 behind… that’s just for one week and it may not
seem like much, but do this for 4 weeks and you’re over budget by $120. One
year, 52 weeks, equals $1,560.00 over budget.
There’s an interesting thing about
money, much unlike credit, the money in our bank account is what it is. Yet
because we often use checks, debit cards and credit cards, sometimes it may
seem like Monopoly money. The fact is, that $50 you had budgeted for food,
is still just $50. It’s not $80.
Now of course you can take a credit card
and make it seem like $80, but then you will pay even more for interest
charges added on next month (f you don’t pay it in full when the bill
comes), and you could start a snow-balling effect with more debt accruing
each month.
You can borrow the money from other
budgeted expenses, but then how will you pay for those things? You can
spend the extra money because you’ve got additional funds coming in next
month, but what if those funds don't come in? Or worse, the car breaks down
and the extra funds won’t even be enough to cover the repairs?
Having a budget simply means you’ve
looked at the money that’s coming in, and rationed it to all the expenses
going out (hopefully including miscellaneous expenses, gift giving funds and
at least one interest-bearing savings or investment account).
The 'IN vs. OUT' totals should be the
same amount. If the OUT section is more than the IN, continue working on
your budget until they are at least equal - even if that means seeking more
income. (And keep reading our money-saving tips and articles each month,
they do help! Sign up for a
free subscription
to our Ezine, if you haven't already!)
Better Budgeting means living a
good life within your budget – which means keeping your living expenses down
to what you can really afford. Then, hopefully, you won't be among that
majority of people living paycheck-to-paycheck.
Next month I’ll write more about how to
stop the paycheck-to-paycheck cycle, so have your budgets ready. If this is
overwhelming to you right now, just start with a list of your monthly bills
and expenses on a sheet of paper. Do whatever you're comfortable with, as
long as it's written down in some form. If you have any questions, please
feel free to contact me,
editor@betterbudgeting.com.
It’s a wonderful life, don’t miss it by
being stressed out about money all the time!
Click here to read Paycheck to Paycheck: Part 2
Michelle Jones, author
of Frugal Family Recipes and Dealing with Debt, is dedicated to helping
families save money and live a better life. She's also a frugal mom of 4
and the Publishing Editor of Living a Better Life: The Free Money-Saving
Tips Ezine. Please visit
www.BetterBudgeting.com to sign up for your free subscription!
Copyright © by Michelle Jones. All rights reserved.
Reprinted with permission.
