In today’s current economic recession, perhaps now is a
good time to sit down, craft a budget and stick to it –
even when the economy improves. According to a recent
USA Today poll, 60 percent of those surveyed said the
current economic crisis is the worst in their lifetime.
The economy will bounce back, but the lessons we learn
from our budgeting exercise will serve us well for a
lifetime.
When it comes to money, there are
basically four groups of people. Which of the following
groups best describes you when it comes to your
financial situation?
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Planners: have total control of
their financial affairs.
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Strugglers: have trouble keeping
their heads above tough financial waters.
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Deniers: refuse to see they are
in financial trouble.
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Impulsiveness: want immediate
gratification. Spend today and let tomorrow take
care of itself.
Regardless of your current financial
situation, a budget will help you to understand where
your money goes each month and ensure that you don’t
spend more than you make.
The first thing you need to do is to calculate your
monthly income, then determine how much you spend on
monthly bills and lastly, track your daily expenses. As
you begin to craft your budget, keep a list of your
regular monthly expenses, such as mortgage or rent
payments, car payment, utilities, food, gas and credit
card payments. Set aside some money each month to take
care of occasional miscellaneous expenditures such as
appliance repair, car repair, clothes and entertainment
expenses. You might also want to set aside some money
for holiday gift buying. It is a lot easier to save a
little now for those gift purchases rather than putting
all of the charges on a credit card in December. The
financial experts will tell you that you need to have at
least three months of living expenses stashed away for
that rainy day.
For one month, carry a notebook with you and write down
every penny you spend from buying a pack of gum to going
out to dinner. At the end of the month, review your
spending to see which items are priorities and where you
can cut back.
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We are never too young or too old to
budget and save.
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Children learn by example. When
dealing with your younger children, take them with
you to your community bank and help them open a
savings account.
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For your teenagers, help them
determine a weekly or monthly spending plan and let
them pay some of their expenses.
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College age and young adults
should craft a budget leaning toward fulfilling
their goals and dreams, whether they want to buy a
house or start their own business.
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Newlyweds need to establish a
budget in order to start their household on
financially solid ground. Prior to the wedding,
couples should attend financial counseling and
candidly discuss any outstanding debt they may have
from student loans or credit cards.
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At mid-life, your budget needs to
include saving money for your children’s college and
for your retirement.
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For those of you looking at
retirement, begin to eliminate your debt and
determine where your living expenses will come from
during retirement so you do not live in fear of
running out of money.
The Internet includes enormous
resources to help you craft your budget. Budgeting does
not have to be difficult, and is very worthwhile if we
are to meet our financial goals and dreams.
CONSUMER TIPS is provided as a public
service by the Missouri Independent Bankers Association
AND
Community Bank of the Ozarks
P.O. Box 43
Sunrise Beach, MO 65079
(573) 374-5245
1-800-927-4314
www.cbobanker.com
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