Is your spending out of control, but you’re not sure where the problems are? Is there no money left at the end of the month and you have no idea where it went? Do you think you’re the kind of person who can’t use a budget?
Congratulations on reaching the point where you know something has to change. This is truly something to be proud of. Many people realize their spending is out of control, but do nothing about it. Instead, they hope the problem will resolve itself. However, inheritances and lotteries aside, it never does.
As in every area in life, you need a solution that works for you. If you feel constrained by a budget, as many people do, there are other ways to get a handle on your money. But before you write off budgeting as something that would cramp your style, give it some honest thought. What is the problem of a budget? If the tracking and paperwork seems too overwhelming and you would like a system that is easier to maintain, I can understand that. But if you do not like the thought of having to make decisions on what you will and will not be able to purchase because there is not an infinite amount of money to work with, it is time for a reality check. Any system will do the same thing because the fact is this: everyone has only a limited amount of money to spend, whether that limit is $10 or $10,000.
Having said that, here are three alternatives for getting your finances under control:
• Decide in advance how much you want to dedicate to savings, how much to charity and how much goes toward your bills. When each paycheck arrives, put the designated savings amount directly into an account you can’t touch. (Come into the credit union to discuss your saving options). Do the same for charity and bills. This is known as “paying yourself first.” Provided you are not using credit cards, this system will keep you from spending the money you would rather be saving.
• A second option is implementing a spending plan. No, this is not a budget by another name. A spending plan gets you organized and lets you know how much you have for each category of spending, not how little. Read up on spending plans in the library or contact us at 515-278-1994.
• If all else fails, work with cash. Designate a specific amount every month that is yours to spend any way you like. Put it into an envelope, and stick it in your purse. When it is gone, there is no more discretionary spending until next month. This is a last resort, but it always works.
Information by Holly Bernal, CCUFC, Chief Operations Officer at Midland Credit Union, 2891 106th St., Urbandale, 515-278-1994.