In recent years Congress has struggled mightily with the budget process but the truth is most of us are not much better at it than they are. Depending on which poll you look at, somewhere between 40% and 60% of Americans keep and follow household budgets. Now that I think about it, that is actually a lot better than Congress seems to be doing. But not very good, just the same.
If you find it hard to save money or even to make ends meet, odds are you don’t have a budget. Having a budget will help you understand where your hard-earned income goes which, in turn, will help you begin to save. A useful budget does not need to be elaborate, more important is that it be understandable and easy to use. Once you get the hang of it, or if you love Excel spreadsheets, knock yourself out, but start simple.
At the website www.bankrate.com you can find an easy to use budgeting tool that will get you started. Biddeford Savings offers a simple budget calculator as well as a link to Intuit’s financial management software, called FinanceWorks. FinanceWorks offers a number of free useful tools and calculators, feel free to check it out.
The real key is to begin tracking your expenditures. You may be shocked to see how much you spend at Dunkin Donuts, Starbucks, or the local pizza place. Once you begin to get your arms around where your money is going you can start to set limits for the various categories. Those limits will be a function of your income and your priorities – keep the limits realistic to help you keep to them.
As they say, Rome wasn’t built in a day and good financial management doesn’t happen in a day, either. Start small, keep at it, and before you know it you will find it easier to meet your obligations and even to set some money aside for the proverbial rainy day. At that point you can start to think about your financial goals, the topic of next weeks’ post. That being said, we do need a stinkin’ budget, so get out there and budget like your finances depended on it (they do!).