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Explaining the article! on 12seconds.tv

Hello everyone! Today I’m going to try and help you out by showing you how to keep a budget! Making a sound budget is really super simple, but sometimes people have trouble sticking to one. I can help you with the creation part, but it’s up to you to stick with it and stay disciplined with your spending. Basically, the whole idea around keeping a budget is to keep you out of debt. That’s the most important thing. The other huge benefit of keeping a budget is that your extra cash gets put in savings and generates even more dough.

For a simple budget, you have two kinds of costs. Fixed costs, which are things you can’t easily change, and variable costs, which are things you have a lot of control over.

Fixed costs include: Rent Utilities Car payments + Insurance + Gas Cable TV + Internet Phone bill

Variable costs include stuff like: Food and other groceries Vices and luxuries (Coffee, Ice Cream, Alcohol, Lotto tickets, whatever)

Of course, not everyone is going to have the same fixed costs or variable costs. Cross things off of these lists that you don’t need to pay for, and add things that you do have to pay for. After that, fill in the appropriate MONTHLY amounts for each. For example, rent could be like $500, Cable $30, Utilities $25, and so on. Next, fill in the amount you feel COMFORTABLE WITH for each of the variable costs. Are you comfortable with spending $150 a month on food and groceries for yourself? Are you comfortable with $40 for iced mocha lattes a month? Once you’re done filling in all your numbers, add them all up and there you have your simple, monthly budget.

Not everyone can do this, but here’s how I handle my budget. First I take the amount needed for a month and drop it into my checking account. It’s not earning interest in there, but that’s ok because I’m going to be spending it before the month is over. Next, I drop a minimum of 10% of every paycheck into savings. This is a good rule of thumb! Sometimes I put more into savings, but regardless, I put some money in my wallet for my everyday unknown costs.

Now, if your paychecks can’t compete with your monthly budget, first you should reexamine your monthly variable costs and lower them a little bit. Eat off the dollar menu for a while to keep yourself out of debt. If you find that your budget is too high and you’ve got EXTRA money, drop the excess into a SCFCU My Whatever Savings account and have a new TV or bicycle or whatever before you know it!

Now, watch this SNL skit with Chris Parnell, Amy Poehler, and Steve Martin for some added advice. With the powerful combo of a simple budget and self-restraint, you’ll be rolling in dough in no time. =)

Josh