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FINANCES
(Continued from page 24)
know where il all goes. Many fami–
lies simply do nol know.
If
you are not now aware of how
you spend your money, you have to
come to grips with where it 's
going.
Finding out how you spend your
money is going lo take a Iittle work
and effort. But it can be fun .
Involve the whole family in the
project. A husband and a wife sit–
ting down together wilh the chi l–
dren will draw lhe whole family
togelher. Husbands and wives will
unders tand each other 's needs and
the children will understand much
more when you say, "We simply
can' t afford it. ' '
The Three-Mon th Analysl s
Now, you are ready lo starl your
own personal budgel analysis. Use
lhe next lhree monlhs to analyze
your ou lgo. The work involved is
well worlh thc effort.
Th is means keeping records of
where your money goes. We've
produced an oulline that will help
you keep track of your expenses
over the three months. If possible,
have photocopies made of this page
so you can experimenl with the
best means of keeping your own
records. You will find during the
three-monlh analysis you will be
making changes in the way you
spend your money.
There are lwo major ways to
keep track of your ex pe nses .
Choose the one that bes t suits your
family 's needs. One efficienl way to
keep track of expenses is to write a
check for almost all ilems in your
budget. Many banks today offer
free checking services or at least
offer low-cosl monlhl y serv ice
charge accou nts. By writing a
check, you will have a written
record in your check regis ter and
you wi ll have a canceled check that
you receive back from your bank.
Be sure you write in your check
register as well as on your check
what the expense is for. By keeping
track of the budget categories such
as we recommend on the accom–
panying charl , you will be able to
see where your money is going.
Of course, checking accounts are
April 1983
not the only way to keep records.
Many families may prefer not to
write so many checks or to even
retain a checking account at all . If
this is the case, a record book or a
notebook will be helpful in keeping
track of how you spend cash.
It
is
going to require special effort by all
members of the family to wrí te
down to whom all expenditures are
made.
It
is amazing what you wi ll dis–
cover when you sta rt keeping this
kind of budgetary record- you fi nd
where the money really goes. Many
families find they are spending far
too much in sorne areas and per–
haps not enough in others. Sorne
will be eating out too much. Olhers
will find they are spending too
much on recreation. Others will
''
The most successful way
to plan for your future
is to establish sound
budgeting principies
here and now .. . . Then,
you must establish
sorne realistic goals for
t he future.
''
find the transportat ion car is cost–
ing too much in repairs. You will
discover these things simply by
writing it all down and adding it up
at the end of each month.
After the first month , you will
have a good idea of where all your
money is going. During the second
month, you will see where you
might make changes and adjust–
ments. During the third month,
you can experiment with these
changes . By the end o f three
months you should have an idea of
what kind of a budget you would
Iike to set up in permanent form.
Don't Jet yourself get d iscour–
aged during this three-month anal–
ysis. Once you have established
your budget, you probably will not
need to keep nearly so detailed a
record as you did during this fi rs t
three months. But many families
give up and quit during the budget
analysis period and never really get
a g rip on their personal finances.
No matter which way you choose
to keep track of your expenditures–
you must find out where your money
is going. And during the three–
month analysis, be detailed . For
example, if you give cash to one of
your children for a movie, be sure
you allocate it to its proper budget–
ary area-entertainment . You don' t
want to have too much money going
out into unaccounted-for, miscella–
neous cash. You have to keep track
of the flow.
Al first it may seem a bother to
bring home the receipts and keep
records of purchases from the gro–
cery store, the hardware store or of
postage stamps you bought. But it
will later yield good fruit when you
analyze where it all goes.
And bringing home receipts can
have a double benefit. Not only will
it keep track of your budget , you
will have a receipt in case you need
il lo exchange a n ítem or have
repairs made. How many t imes
have you found you could not fi nd a
receipt when you needed it most?
If you have a standard place where
you put all your receipts, they wi ll
always be available. You don't have
to set up a complicated filing sys–
tem. A shoe box will do quite well .
Perhaps a special drawer in the
kitchen or bedroom will serve the
purpose. Of course, you can set up
a very detailed accounti ng and
records system if you desire.
S ticking to Yo ur Budget
After three months you wi ll have a
fairly good idea of exactly what you
have been spending and how you
ought to spend your money. If your
family project has been successful ,
each member of the family will
understand his or her individual
responsibility in guiding the family
to financial success.
There wi ll be many temptations
to vary from the budget you estab–
lish. In most cases, you will have to
make up your mind you simply will
not be able to vary from the estab–
lished budget you set up.
Of course how much you have in
the various budget a r eas wil l
depend on your outgo and the cost
of livi ng in your region. If you find
your variable expenses have enough
budget allocation, you will have
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