Budgeting for 2012, Part 1

Thrifty Thinking: Budgeting for 2012 Part 1

Do You Have a Budget?

Money matters are different for every family. Some people have a mound of medical bills to pay. Others have college loans to pay. Still others may have a multitude of cars, boats, and other earthly treasures they have accumulated trying to “keep up with the Joneses,” and have obscene credit card bills to pay. The choices people make with their money can make or break their family. We don’t always think about how even our small purchases can snowball into a huge mountain of debt.

How do you get in debt? Dollar by dollar. How do you get out of debt? Dollar by dollar. It really is that simple.

So to manage your money wisely make – and use – a budget. Throughout our marriage we have had a budget that we follow with flexibility. We reevaluate the budget about every year to see what kind of changes need to be made. I know some people that evaluate their budgets every month. You need to do what is best for your household, and you need to be able to communicate with your spouse about finances. Whether you are new to budgeting or have been doing it for decades, now is a great time to look at yours.

As stated above, we are flexible with our budget. We know the importance of having savings, and how that can be slashed if you lose your job, or your daughter climbs into your dryer for fun, damaging the seal and racking up a $260 repair bill. Or maybe your water heater dies, and you have to replace it to the tune a $550 bill. Life is messy, and sometimes we have to pay big bucks to clean up the messes.

Anyway, we basically use a budget worksheet as a guide. I am not going to list out budget categories here, but there are many free resources you can download off the Internet. For instance, on betterbudgeting.com you can get a wide array of free printable budget worksheets.

When you create or recreate your budget, be realistic. Don’t underestimate the cell phone bill or grocery bill or car repairs. Be honest with yourself. This is the only way you can get down to the bottom of things! May be you need to cut out or cut back certain areas, like the cable bill or Internet, eating out or entertainment. Most of these cuts will be temporary if you adopt new and better spending habits.

True and lasting change happens slowly. Create an attainable budget that introduces you to slow changes. May be cut down on one item a month. This month see how you do without cable. Next month maybe reduce your dining-out budget from $100 a month down to $25 a month. You get the picture. You are much more likely to stay the course if you work at faithful budgeting incrementally.

Happy budgeting!