Money Matters

Some people make millions of dollars a year. The rest of us have to muddle through on less, which means we can’t always indulge ourselves with impulse purchases like Jaguars, Taj Mahal-sized homes and our own private islands.
Regardless of your income, NOT spending more money than you make is an excellent idea. It’s math. So for most of us, “living within a budget” is a great concept.
Where to start? Since most of our bills have to get paid every month, setting up a monthly budget makes the most sense and is the most common way to organize household finances. With that in mind, it’s not tough to create a budget.

The beauty of a household budget

Advantages of keeping track of your income vs. what you spend:

  • A household budget allows you to see where your money is going. With this “snapshot” view you can identify essential expenses (your rent or mortgage payment, utilities, phone, car, food, health insurance) as well as more discretionary outlays that could be cut back if things get tight (cable, restaurant and takeouts meals, clothing allowance, etc.).
  • Living within a budget can also make it easier to save for worthwhile goals, such as money toward your son’s or daugther’s college tuition, your retirement, a dream vacation, or a “rainy day fund” in the event your income is interrupted.
  • Socking away money each onth for a longer-term goal is easier and more painless when you make it as automatic as possible. Buidling it right into your monthly budget does that.

What makes budgeting easier

If you receive a salary, you’re paid the same amount of money every two weeks or once a month. If you’re self-employed or your income varies for some other reason, your budget won’t be quite as straightforward, but the same basic rules apply.

  • Use online banking Today, writing and mailing checks is a waste of time and money. Most banks offer online banking.
    • Sign in to your bank account on your computer or smartphone and pay every bill with a few keystrokes
    • Designate set payments for expenses that are the same each month, such as your mortgage, health club dues or car insurance, and manually pay amounts that change each month.
    • The bank does all the recordkeeping – payment histories are recorded and always available to you as itemized expenses reports at tax time.
  • Get paid via direct deposit. Your paycheck amount goes directly into your bank account after taxes and you 401k contribution are deducted
  • Create a household account. Besides your regular checking and savings accounts, open a bank account strictly for paying household bills.

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