How to Thrive on a Family Budget

It’s a rare family that has not, at one time or another, resolved to adhere to a budget. It’s an even rarer family that managed to swing it without difficulty. The problem which gets in the way is that spending money is a natural human function, whereas adherence to thrift and moderation goes against the grain for most persons. And because of that, the inability to hold spending in check leads to untold misery. Fortunately there are a few basic rules you can follow to make it easier to accomplish. Read on to see how.

Instructions

Difficulty: Moderately Easy

1. Get your credit card accounts in a friendlier mode. You must consistently pay your credit card balances in full before the end of each monthly billing cycle so that interest is never charged. The issuing companies naturally hope you’ll remit the minimum monthly servicing amount, resulting in ever-increasing unpaid balances and a perpetual flow of interest. If you plan to live within your budget, you must disappoint them. If for any reason you cannot follow this rule, then cut up the cards with a scissors and fashion your life accordingly.
2. Never purchase personal or household items on time. During the first several years of their marriage, the living room of a couple I’ve long known remained completely vacant. The reason was simple: They lacked the money to furnish it and refused to go into hock for something they considered nonessential. Today they are wealthy, with every luxury including a beautifully furnished home. It’s my belief that they went about things in exactly the correct manner. The principle is basic: Acquisition of items that are not vital implements of living is deferred until the spare cash is available.
3. Avoid vacations you cannot pay for with cash on hand. You’ll remember your month’s excursion through the Melanesian Islands of the South Pacific for a lifetime. If you can’t actually afford it, you’ll also remember its cost for a lifetime. Vacations are meant to be enjoyed, and returning home with a billfold intact is an important part of that enjoyment. As an alternative, a weekend in the Adirondacks or Pismo Beach may prove to be a far more rewarding experience. Before you make reservations, tally your cash on hand. Your budget will appreciate the consideration.
4. Do not gamble. Whenever an Indian casino opens its doors, it seems to enjoy instantaneous success. Perhaps there is no limit on how many dollars are available for disposal into this bottomless pit. In any event, you will not be a participant in any of this nonsense. Don’t give these sharks your money. As an added thought, add lotteries to your list of no-nos.
5. The vehicle you drive is devoid of financing. No product is more forcefully marketed than the motor vehicle, and far too many people succumb to its allure. No one should drive a vehicle that is financed or leased. Acquire your transportation 100% cash on the barrelhead, even if you must drive a 1984 Toyota Corolla. At a later date, when your fortune is deservedly secure, you may feel free to sport a brand new Rolls Royce—-but again, devoid of financing.

Tips & Warnings

• Anyone can prepare a budget. It takes dedication to adhere to it.
• You must develop a skeptic’s attitude to resist the societal pressures that encourage gratuitous spending.
• Interest is not something you pay; it is something you collect.