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A Simple Spending Plan
Copyright 2000/2001 Deborah Taylor-Hough
All rights reserved. Don't transmit, copy, reprint, post on other webpages, or use in print media without written permission from the copyright holder. Thanks! :-)
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"Financial freedom is where we are at rest and at peace."
--Richard Case, The Money Diet
Probably the greatest single help to our family's financial situation was establishing a budget. Now, don't start hyperventilating and tune me out. I realize the "B"-word (Budget!) sometimes does strange things to people. If the word "budget" makes you sweat and turn purple, try substituting the term "Spending Plan." For some reason, a spending plan is psychologically less threatening to many people than a b-b-b-b-b-budget.
The spending plan our family implemented is known as The Envelope System. It's easy, painless, and it works. This simple plan did more to turn around our financial picture than any other single change we've made in our spending habits.
First, we figured out how much money we needed each month for the different expense categories (food, clothing, gasoline, bus fare, coffee at work, etc.), and placed that amount of cash (yes, the green paper stuff!) into separately labeled envelopes. We then had a concrete visual aid to show exactly how much money we had left to spend in each category. And we clearly saw how borrowing $$$ from one envelope left less money in the other category. And once the money's gone, it's gone!
The Envelope System is perfect for people who tend to think if there's a positive balance in the checkbook, they can keep writing checks. My husband and I learned this simple budgeting trick from the old Marlo Thomas television show, "That Girl." In our case, life imitated art (maybe claiming That Girl, as "art" is stretching the analogy a bit too far).
There's no magic formula to living within your means, whatever those means might be. Whether you're a struggling one income family, a single working mother, or a double income family with mounting consumer debt, we can all use a good dose of reality in the financial area of our lives.
I've known people living beneath the poverty line who never go into debt and never have outstanding bills. I've also seen families living in the grandest homes in town struggling to stay afloat each month due to overspending.
Take it from someone who knows firsthand, it's easy to get into debt but much harder to dig your way back out. The old cliche' is true: the only way to get out of debt is to stop going into debt!
For free financial advice and consumer-debt counseling, contact the nationwide non-profit Consumer Credit Counseling Service at 1-800-388-CCCS for an office near you.
ABOUT THE AUTHOR:
Deborah Taylor-Hough (free-lance writer, wife and mother of three) is the editor of the
Simple Times and Bright-Kids email newsletters. She's also the author of the
bestselling book, Frozen Assets: how to cook for a day and eat for a month, and A
Simple Choice: a practical guide for saving your time, money and sanity.
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