"A budget tells us what we can't afford, but it doesn't keep us from buying it."- William Feather
It's hard to open a single financial advice column without seeing, in bold letters, the fundamental requirement to make and stick to a budget. There are any number of tools available that promise to assist you with this process. But choosing the right budgeting approach, tool, solution and process itself will not solve the challenge inherent in managing money. First, you must understand how your priorities, lifestyle and responsibilities impact your purchasing and saving behavior, and how that in turn impacts your budget.
The Getting Balanced program is designed to help you understand that success in balance comes with trade-offs, and knowing your tolerance for those trade-offs means honestly assessing yourself. Start with questions like the following:
1) How often do you budget?
a. Weekly
b. Monthly
c. Quarter
d. Annually
e. Never
2) What's the most variable 'expense' you have each month?
a. Dining out
b. Travel
c. Entertainment
d. Health & beauty
e. Home maintenance
3) Which of the following debts do you have that you aren't sure when you'll pay off?
a. Bank credit card
b. Store charge card
c. Student loan
d. Loans from friends
e. 401k loan
4) If you had an extra $500 this month from a bonus, on what would you spend it?
a. Clothes
b. Debt reduction
c. Home project
d. Savings
e. New car
5) How do you track your household budget today?
a. Spreadsheet
b. Checkbook
c. Don't
d. Microsoft Money or Intuit Quicken
e. Bank statements
6) With whom do you review your budget?
a. Spouse/partner
b. Children
c. Friends
d. Parents
e. Nobody
7) When you receive a paycheck, in what order do you pay the following expenses?
a. Mortgage/Rent
b. Living expenses
c. Automobile
d. Credit cards/Loans
e. Savings/investments
There are a lot of budgeting plans available to use-some expensive, some free. Some say to track every expense down to the penny. Others tell you to focus on the big ticket items. And for every plan, there is a person that has used it with great success, and someone that has used it straight into the poorhouse.
How can you know what will work for you? Make your own plan. Click here to start your plan for Finance-Budget.
