Reign in Your Personal Spending with Sensible Budgeting

Recently I’ve been getting up-in-arms and have my blood boiling listening to the out of control spending by our government (both Federal and State.)  I believe that I have nailed down the problem.  It boils down to the views on money.  Depending on the type of home life you had, or school/college you designed, it all shaped your views on money.  

I am not trying to offend anyone for their money beliefs or views.  Some view money as the root of all evil, and others believe it’s a world of endless wealth.  While the “root of all evil” happens to be the single most misquoted Bible verse, (the real one is “the LOVE of money is the root of all evil.”  Essentially GREED, it’s a deep-seeded belief with many people, and those people have the mindset that they will always keep them poor.  Yes, I said it, a negative money mindset will keep you poor.  But a view that money is never-ending can also keep you poor.  There has to be a basis of financial education.

Historically, Democrats for the last sixty years have represented the blue-collar worker.  The Republican party represented businesses and white-collar workers.  That being said, when a low-income worker needs more money there are usually three courses of action a blue-collar worker will choose:

• Take out a loan
• Work more hours/Ask for more money
• Get a second job

The problem is, a loan will allow him to spend money he doesn’t have (are you seeing the pattern from Washington?)  Asking for more money could force his boss to give him a raise that might not be big enough to suffice and cause disloyalty between the boss and worker…which could end in no job at all.  Working more hours could do the same, in these times, employers are cracking down on overtime, if the boss comes down on the employee and doesn’t allow any o/t, again, disloyalty and resentment.  So working harder is the blue-collar way to increase income.

When a business (or executive manager of a business) needs to increase income there are tiers they go through.  Some are hard decisions but need to be made.  Now while the business example might not fit with you, but you’ll get the idea.  The steps to increase income are:

• Reduce Office Expenses (i.e. supplies, unnecessary amenities, etc.)
• Raise prices
• Layoff employees

The biggest option you should incorporate is the reduce expenses.  Do you have the premium digital cable package?  If so, do you watch all those channels?  When’s the last time you watched a movie on HBO or Showtime?  See if you can reduce it without bumping out of a bundle deal.  If it is cheaper to keep it for two or three more months, move on to something else?  Have a media bundle with your cell phone?  How often do you use it? Just sit down with everything and look at ways to reduce expenses.  How often do you eat out?  A family of four can cost over $100 depending on where you go.  If you eat out twice a week, every week, that’s over $10,000 per year!  Do you smoke?  Not only would you get a discount on your health and life insurances, at a national average of $7.00 per pack, and if you’re a pack a day smoker that’s $2,555 per year…that you BURN!  And that doesn’t even include any applicable sales taxes.  

Sit down as a family, if the kids are old enough, and come up with an agreement.  Make 1 night a week the eat out night, and stick to it.  Also, a suggestion for out-of-control spending within your household, come up with a good number $50-$100 per month that will be used on “wants.”  And take turns each month on who gets to buy their want.  Not only will this help reign in spending, it will also teach your children about self-control where money is concerned.  For example, my son wants to go to the Aquarium, I want a new iPod, and my wife wants a new microwave.  While $50 per month won’t buy one alone, each month the money rotates into someone’s pocket, our son is saving for a trip to the Aquarium of the Americas in New Orleans, LA, my wife is saving for a microwave and I have to decide if I want an iPhone or an iPod nano.

Be creative and you’ll never realize how much you CAN live without.

Related posts:

1. Personal Finance Education
2. Understanding Your Financial Report Card
3. Generating Passive Income