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HAVING ANY trouble coming up with the money for your holiday purchases this year? Don't know where you will get the money to pay off your credit card debts?

A "yes" to either question means that, once the holiday hubbub has settled down, you probably should begin thinking about getting on a budget.

To many people, that six-letter word sounds almost obscene, implying stinginess, thrift, macaroni and cheese dinners, an end to nights out on the town, and worse.

A budget can be much more attractive than that, however. In fact, it should be your ticket to financial freedom, helping you build your net worth while giving you the ability to pay for things you want.

With a properly managed budget, you should be able to do your Christmas shopping without worrying about how you will pay for everything. You should be able to set aside money for a vacation and a new car.

Most important, you should be able to build a savings and investment pool that will help you maintain a decent lifestyle in retirement.

With a good budget you can eliminate many of your financial worries and debts. You will be able to take control of your financial life, rather than surrendering control to bills, emergencies and inflation.

A budget has two functions: It is a tracking device that helps you figure out where your money goes, and, more important, it is a planning device that allows you to decide what to do with your money.

Because many people have no idea where their money goes, tracking comes first.

Go through your check registers, bill payment stubs and credit card receipts for the last year to reconstruct a record of your family's ordinary living expenses, recommends BankCard Holders of America, a consumer advocacy group.

Since many payments and bills are made on a monthly basis, compile your list in the same fashion. If a particular expense is familiar only on a weekly basis -- your $75 weekly bill at the supermarket, for example -- simply multiply that amount by 52 weeks, then divide by 12 months to get the monthly total.

Make a list of recurring expenses, such as your mortgage or rent, insurance premiums, utility payments, property taxes, loan payments, weekly grocery bills, subscriptions, charitable contributions and the like.

Don't forget your transportation expenses -- car payments, gas, maintenance and insurance if you drive, the cost of tokens or passes if you take public transportation.

Then try to reconstruct a record of your cash
purchases, including such items as doctor visits and medications, meals away from home, entertainment expenses, and impulse purchases.

Add it all up and compare it to your income for the last year. Don't forget to include bank interest and investment earnings.

If there is a big gap -- more income than expenses -- that you cannot account for, you may not have completely listed all your expenses. In that case, it may be wise to carry a pocket notebook around for the next three months and note expenditures.

Jot down every expense, because even small purchases can add up to big bucks. Eighty cents a day for a coffee and doughnut at work can add up to $216 a year, says BankCard Holders.

You will learn a lot from this exercise. You may find that some frivolous expenses are eating up a lot of your money, while more important items -- such as college savings for the kids or retirement savings -- are getting pennies.

The Consumer Credit Institute recommends posing this question: "Are you spending your money on the items you truly want, or are you frittering away your paycheck on unnecessary expenses either as a result of vague spending priorities or poor shopping habits?"

If so, examine each line on your list of expenses, looking for possible ways to redirect your money.

For instance, suppose it costs $10 to make dinner at home for the family. You take the family out for dinner five times a month at $35 a shot. Staying home for dinner one extra night per month would give you $25 a month, or $300 a year, to save or invest.

By doing this exercise you can begin to plan your expenses, deciding how much to spend and where. And you can begin to plan your savings, setting aside specific amounts of money each month for your short- and long-term goals.

For some free help you can get a "Consumer Budget Planner" from the Consumer Credit Institute, an educational venture of the American Financial Services Association, which is a lender's trade group.

For a copy, send a self-addressed, stamped, business envelope to American Financial Services Association, Dept. CBP, 919 Eighteenth St., N.W., Washington, D.C., 20006.

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