Try a budget to keep yourself out of financial trouble!
Draw up a budget? What a mad suggestion. The average reader will find his eyes glazing over at the mere thought of something as hideous as drawing up a budget. That’s surely an activity reserved for geeks and weirdos.
And that’s the problem isn’t it. Most people don’t consider budgets a big issue. They will gladly perform a myriad of tasks daily that bring structure to their lives. Set the alarm clock. Munch through some horrid tasting cereal because it’s good for the digestion.
Get to work to perform boring and monotonous tasks. Live daily life in a totally structured manner until very few minutes in the day are available for spontaneous experiences. Yet, something as structured and necessary as a budget is frowned upon.
A budget provides the basic information to allow spending decisions to be made. Most people have a set income with which to work. It is only the monthly expenses where some control may need to be enforced.
It seems an almost impossible task for the average person to be able to work out what is left over after all set expenses have been deducted. Yet it is hardly a skill requiring an Einstein type of mind.
Fill in the amount coming in every month and deduct all expenses that come off every month such as mortgage repayments or rent, motor vehicle instalments or transport costs, costs of services such as electricity and gas and an allowance for food.
Don’t forget to allow for annual deductions such as licenses and memberships or pleasurable items such as holidays. The rest is available for arbitrary spending or saving.
This calculation seems to be beyond most people’s capability. In fact women in particular seem to roll their eyes in despair, fish out their credit card for some retail therapy and leave the bank account to look after itself.
So for the New Year’s Resolution number 2 in 2010 compiling a budget every month could be a novel experience. For those who find self-discipline a problem, putting away those credit cards, cancelling the bank overdraft could be a method.
Stop spending money when it runs out during the month. During the first few months it might even be necessary to eat with parents and friends. Making the drawing up of budgets a habit could be the best Resolution anybody could bring on board.
For those people with complex income structures and diverse expenditures a budget might need to be prepared by an accountant. Whatever the set-up, it is not an impossibility. It could certainly have helped such celebrities as entertainers Burt Reynolds and Mickey Rooney, Willie Nelson and Jerry Lee Lewis.
Industrialists such as Henry Ford and Henry John Heinz has similar fate befall them. Even Donald Trump mismanaged his budgets. Mind you, Donald Trump would probably not have been helped with a budget!
For Joe Average though a budget is a great tool to help with keeping their financial boat on an even keel. Try it in NOW.