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Living a Better Life The Balancing Act of Budgeting Budgeting is kind of like balancing your checkbook, but not quite as simple. There must be enough coming in, to cover what's going out. If your list of expenditures totals more than your income, you're headed for trouble. * * * Sure you can make up the difference with bank loans and those little plastic cards for a while, but it may turn out to be a horrendous mistake if things don't go as good as you hope they will. When someone gets sick, loses a job, or worse, what will you do then? If things are going well, get your budget balanced now, while it's easy. But if things are already a big mess, it's never too late to get them straightened out, it's just going to take longer and be more difficult. Moving down is never as easy as moving up, but the sooner you get your finances in order the sooner you will have a better life. I'm not saying you can't have a good life with a mound of debt on your shoulders, in fact, depending on what kind of debt you have, you may be living quite the high life already. But, when you sit down to pay your bills, when you see those debt balances rising, how good are you feeling then? You don't need an expensive computer program or an accountant to create a budget, all you need is a pencil with a good eraser, a few lined or green column sheets of paper, and a simple calculator. Creating a Balanced Budget* Make a list of your monthly bills and basic needs such as housing, utilities, household groceries, prescriptions and gasoline for the car. Go ahead and add these up, you should have a surplus when comparing this total to your monthly income. * Now, make a list of your extra expenses for everything else, such as insurance, medical co-payments, car repairs, vacations, gifts, clothing, eating out, etc. Are we doing okay? Still have a surplus? If so, great! If not, don't panic. It's probably been this way for a while; you just weren't looking at it in harsh black and white print.
If you have a surplus make sure you are investing it wisely, and not just letting it sit in the bank. Three great books that I recommend are: Investing For The Future, by Larry Burkett, Investing for Dummies by Eric Tyson, and The Wall Street Journal Guide to Understanding Money & Investing, by Kenneth M. Morris, et al. You can find all of these on my recommended book list If your budget is short (in the red), sit down and study it thoroughly. Here's a list of what you can do next to balance your budget...
Examine every expense you have and try to lower it or cut it out all together. You have your current budget already written out, now you need to make another page for your 'ideal' budget. I don't mean your ideal income; I mean your ideal outgo that will create a surplus for savings. Once this ideal budget is written out, you will know exactly where you need to make adjustments. It may take some time to get your budget balanced, but the sooner you get started the sooner it will happen. Copyright 2001 by Michelle Jones
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