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the borne. Once settled in a resi–
dence, you must provide food and
clothing for your family. After
those things, there will be smaller
day-to-day necessities and you
might have room for a few luxury
items that must be placed last on
your list.
The first and foremost rule of
family financia] planning is never
oblígate yourself to more than you
can afford to pay back.
Principal Budget Areas
Follow that basic rule of thumb and
you will never ·be in debt above
what you can afford to pay. There
are many books available on the
subject of family money manage–
ment and budgeting. Most family
financia! planners will advise that
an average family in Canada or the
U.S. must plan to spend about 25
percent of income for borne mort–
gage or monthly rent payments.
Because of the spiraling cost of
mortgage rates and housing costs,
this percentage might have to be
increased to 30 percent. Any family
that spends more than 25 percent
of income for the monthly house
payment needs to realize tbere will
be sacrifices · in other areas. This
housing payment should generally
include the cost of utilities and fur–
nishings where possible.
After housing costs, you will
have to consider food and items
purchased at the grocery store.
This will generally average about
20 percent of the monthly income
in developed countries. Of course,
married couples without children
can spend less than larger families.
Food is cheaper in sorne areas of a
country than others. Many more
families are turning to backyard
_gardens and forming neighborhood
co-ops in order to save money in
food purchases. You can adapt a
particular percentage to
yqur
own
local condition- know how much
groceries cost and how to properly
spend your money for food. This
responsibility is often delegated to
the wife in th<? family. A wise and
cautious shopper who buys the best
quality foods at the best possible
prices can be a real asset to family
budgeting.
·
Sorne families can get by on cloth–
ing expenditures of approximately
5
percent to 1
O
percent of their annual
18
income. Other families where cer–
tain type clothing might be required
for business might have to spend
more. This is another area where
self-control becomes important.
Changing fashions and intensive
advertising campaigns draw our
attention to clothing items, and we
become easy targets for over exten–
sion of our budget in this area.
.This is a good time to once again
encourage you to exercise caution
in using credit card purchases. It is
not at all unusual to purchase cloth–
ing items on credit plans and have
the item oí clothing worn out, or in
the case of children, outgrown, by
the time it is p.aid for.
After these three basic necessi–
ties-food, shelter, clothing-you
will probably have to take care of
your transportation needs. For
most, tbat will be in the forro of a
car payment and operational costs
for your automobile or for public
transportation. Don't forget to
budget car repairs.
If
you live in an
area where public transportation is
available you may use public trans–
portation more frequently and not
buy as late a model car as you
might if you simply have to have a
car for daily transportation needs.
If
you must purchase an automo–
bile, purchase one you can
afford-it may have to be an older
model than you would like and
don't forget to calculate the cost of
operation.
If you've been keeping track of
the percentages, you soon will real–
ize that the basic necessities of life
often consume the lion's share of
your salary. After God's 10 percent
plus offerings, the government
takes perhaps 20 percent, and 25
percent goes to housing, 20 percent
to food and
5
percent for clothing.
All of a sudden, 85 percent or more
has been consumed and you have
not been able to buy insurance, get
the dry cleaning done, go to the
dentist, and you haven't had any
entertainment built into your
budget or set aside savings.
Recently, 1 was covering sorne of
these principies in my college class
and we all jokingly concluded at
the end of the lecture that with all
of these costs and percentages, we
could not afford to be alive. •Of
course, that's not true, but it does
illustrate the point. No matter how
much money we earn in salary, it
seems we'll always be able to spend
it. Only a few wealthy individuals
make more money. than they can
spend. Since we are in the same
boat trying to keep up with spiral–
ing inflation and enjoy the conve–
niences of modero life, we all face
the same problems of budget and
control.
If you want to control your mon–
ey and stay out of debt, you will
have to know where you're spend–
ing it.
The most helpful hint 1 can give
you here is to keep records. One of
the best things a family can do is
sit
down together
and
plan
a realistic
budget and help each other stick to
it. Perhaps it means moving into
less expensive housing quarters, or
stepping down in the style of trans–
portation.
lt
often means delaying
purchases for items you would like
to have but really can't afford at
this time. Then, make an accurate
listing of all expenses for a period
of about three months. This will
help you analyze your outgo.
Whether you keep your records in
a notebook or shoe box, keep them
where you can have them available.
Set up sorne kind of system so you
can write down your needs and pay–
ments
every single paycheck.
And most important, before you
buy any major new item, or before
you take that trip--sit down and
talk it over as a family!
Impulse
buying is one of the great culprits in
creating consumer debts. Thé sales–
roan knows how to tempt you and
lead you into the purchase. Many
salesmen are trained experts. They
subscribe to a study that generally
states most purchases will be made
on the first visit. Have you ever won–
dered why that used car salesman
puts so much pressure on you when
you're wandering through the . lot
merely looking out of curiosity or
because you hada little extra time?
If he can get you interested, see the
glint in your eye over a particuhir car
or in the case of housing, if you
express an interest in that time-shar–
ing plan, he will put the pressure on.
And thousands of people fall for it
every day.
Make it a personal rule in your
family that you will make no pur–
chases, make no financia! decisions,
(Continued ·on page 44)
The
PLAIN TRUTH