|
|
Which statements represent your
feelings about the way you manage money?
- I can't plan my spending until
I have more to spend.
- There's always too much month
left at the end of the money.
- I just try to give everyone something
to keep them off my back.
- I can manage most of the time,
but emergencies throw me.
- I always spend too much for the
holidays, then pay for it the rest of the year!
- I am covering the basics, but
I just can't save anything.
Many people feel they never have enough money to pay all their bills. Try
as they might, they can't seem to stretch their paycheck far enough to live
within their income.
More income is not always the answer to money problems. Often the solution
is better planning.
For many people, the idea of using a budget sounds scary and difficult
and creates visions of being deprived of things that are really needed.
To the contrary, a budget, or spending plan, is a way to plan and monitor
your spending so that you will have money for your needs as well as your
wants.
A spending plan puts you in control of your money, rather than letting
your money control you.
Instead of pinching pennies, worrying if there will be enough money
to pay bills, or doing without, a spending plan can help you plan ahead,
set priorities, and achieve financial peace of mind.
A budget or spending plan is a method of putting on paper or a computer
disk your total income and spending for a specific period of time.
Those who regularly use a spending plan find it an effective tool to
help them get the most for their money. A spending plan will help you:
- make decisions about how to spend
your money.
- focus on short- and long-term
goals.
- provide for needs before wants.
- match your spending to your current
income.
- identify and plug leaks in spending.
- prevent family arguments over
money.
- adjust to sudden changes in income.
- adjust to changes in family size.
- include systematic savings and/or
investment features.
Every family will have a somewhat different plan, depending upon their income,
stage in life, money management skills, and needs and wants. However, every
plan will help you:
- Determine your monthly
expenses.
- Decide which expenses are
the same each month and which vary from month to month (fixed versus
variable expenses).
- Determine your total monthly
income.
- Balance income and expenses.
- Put the plan in action.
- Review and revise the plan
|
