The Bank Won’t Spot You $20
People who get into financial trouble have usually made certain basic mistakes. Calls from collection agencies, lawsuits, and sometimes bankruptcies occur to people who could have avoided them. Once things start going wrong, they go from bad to worse. Difficulties with your job and family often follow financial problems. The advice in this chapter depends upon two things.
First, you need a source of a reasonable amount of income to make anything work. For most, this means a job, a partner with a job, or both. Second, you must have some self-control over how you spend money. If you make a modest income but insist on driving a Lexus, there is very little anyone can say to help you. However, with a decent income and reasonable control over your spending, there are a lot of things you can do to make things better for yourself.
Making and Using a Budget Making and using a Budget
Making and using a budget is essential for anyone who wants to conduct business and legal affairs in an orderly and responsible way. Doing this does not require a great deal of work, but it requires thoroughness, accuracy, and discipline. The reward for these efforts is that, if you follow a few simple rules, you will never find yourself in serious and embarrassing financial difficulty.
Checklist for Making and Using a Budget
- List all your sources of income
- List all your monthly expenses
- Verify all questionable items
- Allow an amount for unforeseen expenses
- Revise your budget regularly as new income and expenses arise
List All Your Sources of Income
For most recent graduates, salary is the main item of income. Some graduates have other sources of income, such as an allowance from parents, funds from trusts, or investments and interest. In a few situations, a graduate may have a special source of income, such as damage payments from a past accident or an award of some kind.
The income part of your budget should include each of these items to the extent that it is a definite, regular source of income. Do not include items, such as periodic gifts from parents, that may change in reasonably short amounts of time.
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