Basic Budgeting

Often, when you cash a check through a bank, your money is given to you in a cash envelope. People used to spend the money in this envelope wisely, knowing that there was no more money until the next payday. They physically could look and see how much they had left everytime they shopped or thought about shopping.

Have you been wondering whether or not you need to develop a financial budget? Here’s a simple Yes/No quiz that can help you understand your BQ or Budget Quotient.

1. Are you already short of money when there are six or more days left in your pay period?

2. Have you received at least one call from a creditor in the past 30 days?

Most Americans are fond of spending beyond their means, as shown by the rising number of Americans with credit card debts. The average credit card debt for an American is now $8,500, the highest so far. It is said that most Americans spend 10 percent more than what they earn. The root cause of this is the average person’?s inability to budget his finances.

A lot of people hate budgeting, or just plain refuse to budget, thinking it unpleasant and restrictive. Actually a good financial plan, including a budget, puts you in control of your finances, rather than the other way around.

Thousands of wage earners and single business owners live on borrowed money until a drastic change in earnings forces them into a downward spiral of mounting debts and missed payments that budgeting wisely could have prevented in the first place. Getting out of debt is not easy but it can be done by consolidating credit card payments into one payment and only using it for extreme emergencies freeing up some much needed cash.

The pre-Christmas period is the peak time of the year for retail sales, and many department and other stores depend on a successful Christmas for their annual profits. There is another side to that coin: the same period is also the peak time for consumer spending. A surge in consumer spending often means a jump in borrowing to support that spending in the stores.