Where Did All My Money Go?
In this day of instant gratification, we see a lot more of impulse shopping. Retailers have spent millions of dollars on finding every last way to get you to part from your money. Debit cards, credit cards and now smart phones have made making purchases as easy as ever. So is this the reason why we now are seeing fewer people with an established savings account? People living from paycheck to paycheck and believing "too much month and not enough money"? The lost art of the monthly budget has gone the way of the land line for phones and dial-up internet.
Making a budget used to be a monthly task for almost every household. You would sit down, make a budget of what you must pay, how much you would save and what you would like to use any additional money for. This also used to be a time when people would balance their checkbook. However, it seems the checkbook register is a thing of the past, as well as a budget. Perhaps this is why some people end up with nothing to show for their hard work, except for possessions and maybe some extra debt. The ease of paying for items and checking your bank account has made the budget obsolete in a lot of people’s minds. Now don’t get me wrong, technology has made things a lot more convenient, but I don't think it was designed to replace these staples of the past. In fact, it was made to enhance them. Enhance the way we teach our kids to create a budget. Enhance the way we track our budget. Enhance the way we save for the future.
So how do we get the budget back into line? How do you create a budget? How do you stick to your budget? First, you need to figure out what your take home pay is for your household. Once you know this, then you need to figure out what your necessities will be for the month. This will most likely include house payment, car payment, insurance, gas for the car, utility payment, other credit obligation payments and groceries. There may be others, but these are the common budgeting categories. Then you decide what you need to budget for extras. These may be eating out, date nights, shopping, kid’s activities and any other things that are not a necessity. Then you have to decide on what you save. (Some people will say you should save first, which is okay too, as long as you know your budget, are able to pay your bills and pay them on time.) You might want to start small, or split the leftover money between savings and paying down the current debt you may have. Once you add all the necessities, the extras and the savings, you need to make sure your income can support it. If it will not, then you will need to figure out where you might have to cut back. It might be eating out one less time a week, or spending less on extras, like clothes. You must make sure the numbers add up.
Once you have this amount, you need to stick to it. If you know you only have $100 for eating out this month, then you know you'll only be able to go out for steak a couple of times, as opposed to a fast food restaurant which you could dine at a few more times. If you know you have a specified amount budgeted for groceries, the beef jerky at the checkout line might not be as tempting as a couple of pounds of ground beef that can make a few meals. Once you start thinking in terms of what you can spend, compared to buying what you want, money seems to go a little further than you expected.
Your parents and their parents before them most likely knew how to make a budget. They knew what they could buy and what they needed to hold out on for another month. Trends are always resurfacing... the financial budget should be something we bring back with open arms.