Living a Better Life
(featured column... from the editor's desk)

Living Paycheck to Paycheck
by Michelle Jones

During a speech in 2003 regarding his new tax plan and economy building ideas, President Bush said something that I will never forget and neither should you.  He reported that personal debt is rising rapidly (it’s at an all-time high, as usual) and a majority of Americans are living paycheck-to-paycheck.  I understand this kind of stressful living, firsthand, but it doesn’t have to be this way. 

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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 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!  Following, is one of my favorite examples that financial expert, Larry Burkett, used to share often... to explain why more money is usually not the problem.

There's a man who makes $30,000 a year, one who makes $50,000 and another who makes $100,000.  You probably think the first one may be getting by okay, the second one is doing a lot better, and the third one is doing GREAT, right?  

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 are great, of course, 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 25… 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… I do understand.  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. 

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Copyright © 2003 by Michelle Jones

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