Sunday, November 21, 2010, PM | 8 Comments
This topic has been beaten to death by all the finance gurus on this planet. Everyone goes into such intricate details that consumers just get lost and stuck in the whole quagmire. How hard can it be? Bring simplicity back in your life. That’s the only way you can survive these days. You get your income from all different sources – the main source is usually your employer if you are gainfully employed.
If you have no job and haven’t had one for some time like a year or so, you don’t need a budget. Just stop spending. Don’t buy anything except maybe food. I said maybe. Unemployed are not expected to take part in the supposedly growing economy. How can they? They are exempted. They are what is known as persona non grata. You exist but you don’t. You are legally not welcome.
In any case, take your income. Obviously you know how much it is, right? For simplicity lets make it $100. [I come from a third world country. Hundred dollars is a lot of money back there.] Now start spending on your needs but not on your wishes – food, a roof over your head, perhaps a pair of jeans.
Don’t go overboard. Remember you have $100 income. As long as you spend below $100 during that paycheck, no matter how much you make in real life, you would do OK. And you thought you couldn’t save money. You don’t need a calculator. What you need to do is change your mindset from spending more than you make to spending less than you make. How hard can it be to replace more with less?
That’s it. That’s the budget for 2011 and beyond.
Forget about retirement. Even today there is no retirement. You just keep working til the time comes when they put you six feet under. That’s the only time you stop working. As long as you have financial worries, you don’t quit working. It’s the survival of the fittest.
Everything else is a variation of what I just described. More than that is confusing. Nobody follows budgeting anyway. People spend days and weeks coming up with all the details of spending. Look at your income. Most probably it comes from just one source. Now look at your expenses. Probably hundreds of categories. The major category of spending is following the Jones’. Stop following others.
Become a millionaire…
Sixty years from now, when you get to be a millionaire, you would be too old to spend it on anything you had always wanted. Stop worrying. Keep spending as long as you don’t spend more than your income. That’s the only budget you need and should follow. Just be realistic and truthful to yourself. With the little saving you do every paycheck, you would be a millionaire in 60+ years.
A wise man once said…
No matter how much assets and cash you own, the money you spent on your person was yours. [Mind you I used past tense.] The rest is not. Think about it.
In a Nutshell
Spend less than you make. You can probably make it to be a millionaire in 60+ years. Because during every paycheck you would be in the black. In other words, you would be saving money no matter how small an amount that is. Not bad for someone who is just starting to understand budgeting 101.