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This may come as no surprise, but three out of
four Americans hate financial planning. Many of
us like to dream about things such as buying a new
home, traveling to different places, sending our
children to college, or even retiring early. Unfortunately,
the reality of financing those dreams often prevents
many of us from living them out, which may explain,
in part, why so many people hate financial planning.
With some patience, planning and discipline, you
can achieve some if not all of your dreams, and
at the same time, feel better about yourself and
your money!
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Sorting Your Money
by Terry J. Rigg
For anyone that is familiar with The Complete Budget and
Bill Organizer, http://www.homemoneyhelp.com/BBOonline.html
you already know that I recommend that you use your checking
account to pay bills and cash to cover your household
expenses.
With all of the different items that the average individual
or family spends money on, it can be difficult to keep
it separated. You have to have money for groceries, car
gas, school lunches, Groceries, Dining Out and Entertainment
just to name a few.
You could buy a box of envelopes each payday and sort
the money on payday and stuff the money in an envelope
until you need it. Of course, then you would have to have
a safe place to keep it.
If you like the envelope method, then by all means use
it. However, the entire purpose of The Complete Budget
and Bill Organizer is to simplify things. Sitting down
at the kitchen table each payday and sorting cash is far
from simple.
It would be much better to try storing it in your wallet
or purse. You would have the money when and where you
need it. There is an element of risk that the money could
be lost or stolen. If you don't feel comfortable with
having that much cash
in your wallet and don't have problems handling your checking
account, you could deposit the money for groceries in
your account and write a check for your normal grocery
shopping. I wouldn't write a check for just a milk and
bread run.
For a family, a budget keeper should be assigned to sort
the money. They would be responsible to distribute the
money to other members of the family. To do this you will
have to clearly define who in the family is responsible
for what expenses. Let
me give you an example:
A family with a working dad and a stay-at-home mom with
three teenage kids may distribute their money like this:
Household Income after money for bills is deposited in
checking: $500
Mom is assigned as budget keeper and keeps $355. Out of
this money she is responsible for buying the groceries,
health items, cleaning supplies, the families clothing,
school lunches, pay the paper boy and other expenses around
the house. Mom takes $50 out of this money for herself
that she doesn't have to account to anyone else in the
family for.
Mom gives dad $100 of which he is responsible for paying
for his expenses to get back and forth to work including
car gas. Dad can use $50 of his money that he doesn't
have to account to anyone else in the family for.
Mom gives each of the three kids an allowance of $15.
This money can be used any way they choose.
By sorting your money this way, each member in the family
can keep the money in their wallet and all of the responsibilities
are covered. No, you won't know exactly how much you spend
each month on groceries, car gas, etc. The main point
of a simple budget is to make sure you have the money
to pay everything without the hassles like sorting your
money into envelopes and accounting for every penny.
Mom, as budget keeper, would also be responsible for keeping
the budget, paying the bills and depositing money in their
savings. This does seem like a lot of responsibility for
just one person in the family but, to ensure that their
finances are organized and everything is covered, it is
absolutely necessary. It is also important to make sure
dad knows how mom is handling things so that he can step
in if the need arises.
While developing your budget using the Budget Worksheet
you will know what your household expenses are. Simply
take that list and assign it to a member of the family
along with the money to cover it. If you run into problems
and somethings aren't being paid, you will probably have
to review your budget and reassign these
responsibilities.
About the Author
Terry Rigg is the author of Living Within Your Means -
The Easy Way http://www.homemoneyhelp.com/ebookadpage.html
and editor of The FREE Budget Stretcher Newsletter and
Budget Stretcher web site http://www.homemoneyhelp.com.
He has 25 years of experience counseling individuals and
families concerning their personal finances. |
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