Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, January 3, 1994 TAG: 9312310029
SECTION: MONEY PAGE: A-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The American Financial Services Association said its surveys show that most people actually have no idea where their paychecks go each month.
To get the greatest return on your income, the association said, you must know how much money you have to spend, set priorities, develop a budget and spend according to the budget.
A budget is a plan for coordinating income with expenditures.
There is no average budget. The plan that works for you depends on your own spending priorities based on your personal needs and lifestyle.
The association created the budget work sheet that is included on this page to apply to as many financial situations as possible.
That means you should cross out the categories that do not apply to you and focus on those that reflect your own situation.
Use the work sheet to create your budget for new year. Here is advice from the association on how to go about it:
Fill in all the items marked with an asterisk. These are your fixed expenses that require set payments on a regular basis, either weekly, monthly, quarterly or annually.
The remaining items are variable expenses or those that can change from month to month.
Families have more control over how much money they devote to variable expenses. You may have to estimate the amount you spend on these items.
Total all the expenses and all the income, then subtract expenses from income.
Is there a surplus? If not, adjustments must be made.
Use the work sheet to analyze your spending habits. Are you surprised at the amount you are spending on some categories? Are you saving money for the things you want to buy? Can you start by cutting back on some items?
The association suggests that you ask yourself if you are spending your money on the items you truly want. Or are you wasting your earnings on unnecessary expenses?
Here are the association's tips for creating your budget:
Keep it simple, but commit it to paper. You will have a better idea of where your money is going.
Be realistic about anticipated income and expenses.
Plan a regular savings program to cover extra things you may want, such as a new car or vacation, so you will have enough cash to pay for them. You should also attempt to save enough cash to meet unexpected emergencies.
Anticipate larger, single-payment annual expenses and put aside one-twelfth of those totals each month.
Establish a regular weekly allowance for each family member as an alternative to record-keeping of small purchases.
Do not set spending limits that are impossible to meet.
Keep your budget flexible. It should give you a general idea of how your money is being spent, but it should not control how you spend every dime.
Maintain good records by paying by check whenever possible.
Consider designating one person in your family as chief money manager.
by CNB