Thrifty Thursday~Easier Budgeting

Easier Budgeting – Don’t Make It So Complicated!


by Jill Cooper
 
I once worked for a man who had a major problem controlling his spending. Here’s what finally helped him: Every Monday morning he put a $20 bill in his wallet. That twenty was all the money he allowed himself to spend for the whole week. It was his lunch money, pop money and, if he saw something at a store he really wanted, he had to buy it with his twenty or do without it.



This made him go home and think about the thing he wanted. Did really need it? Was it really worth it? Half the time, just having to drive back to the store was enough to deter him from buying it.


He even found himself making a game of it challenging himself to see how much of the twenty he could still have left at the end of the week. He started saving the extra money to use for something bigger and more special that he wanted. Often, after he had a nice chunk added up, he decided to just apply it to a bill. Watching that bill slowly go down told him he was winning the game.


If you have tried other ways unsuccessfully, you might try the twenty dollar bill idea. –Oh, and it doesn’t have to be a twenty. Depending on your circumstances and where you live, it could be more or less, but pick an amount and stick to it. It may take a week or two to figure out how much you want to allow yourself but, after that, use a set amount and that amount only for your miscellaneous spending money.


With this system, if you spend it all by Wednesday, too bad! You will have to eke by the rest of the week and, if you aren’t already bringing your lunch to work or finding other ways to save, you will find yourself starting to do it just so you can save more of your "twenty".


What I like even better about this idea is, at the end of the week or month, instead of having a huge column of little piddly things to add to your ledger, you only have to make one entry for the twenty for each week.


I did find it interesting that at the end of the show, after presenting all of these complex suggestions, the woman was asked "What do you do if your house payment is more than you can afford and you are deep in debt?" She paused with a strange blank look on her face and said, "There are only two things you really can do– earn more or spend less."


That’s it in a nut shell. We can make charts and write lists but the bottom line is, we simply need to either stop spending or start earning more.

Too often, we focus on learning how to get out of debt with the misconception that, simply by learning, we are doing something about our problem rather than focusing on getting out of debt by actually stopping our spending.


Often, we want to know how to save on the large amount of groceries we buy, never thinking that we could save a lot simply by not buying so much. Or, here’s one that I love: "My husband lost his job, so how do I save on our vacation?" I don’t know how to say this gently but, if you don’t have a job or you had a pay cut and don’t have enough money, you don’t take a vacation, play golf, buy new things to fix the house, put your kids in sports, throw expensive birthday parties, keep buying junk food or convince yourself that you really need to keep your cable and Internet to help you find a job.


There is one way and one way only to get out of debt and that is to spend a lot less than you make. The more desperate your situation, the more drastically you have to reduce your spending. Some of you may have to go from having your hair, nails and toes done once a month to only having your hair done. If things are really tight, maybe you can’t pay to have anything done most of the time. You may have to learn to share only one car. You might have to start walking or taking the bus. Whatever you need to do to pay it off, get serious and do it.


Key words for today’s lesson. Stop spending or start earning more.