Articles of Local Interest

Make your money work for you: budgeting basics
By Lauren Mulverhill

Billion dollar companies have them. And if you're about to embark on a new life together, you and your spouse should have one, too: a budget. Although budgets often get a bad rap, they're really nothing more than a money plan. Together, you can be in control of your money, instead of having your money limit what you do.

"Couples bring different values of money into a relationship, and that can work for or against them," says Roland Chupik, president of San Antonio's Consumer Credit Counseling Services (www.cccssa.org). "When they're making wedding plans, the bride and groom focus on things like flowers, not finances."

Chupik's organization helps couples brainstorm about all the expenses they'll have now and in the future: things like rent, groceries, clothes, utilities, cell phone, medical, car. "We suggest they put everything imaginable into budget, then create an allowance system that meshes with their value system of money," he states.

Setting up a budget together in the beginning will save agonizing over spending decisions every month throughout your marriage, says Jane Chidester, author of "BudgetYes! 21st Century Solutions for Taking Control of Your Money Now!" By setting it up together either one of you can "run" the budget. "With a budget, you have a tool for communication that you both know how to use. You have a consistent method," she says.

"Probably the biggest reservation couples have about starting a budget is the idea that a budget is like a diet - that they have to "give up" things to make it work," Chidester reports. "A budget actually shows how you can increase your spending money through organization. You can actually get money back by budgeting!"

You can create a budget on your own, using various books, publications or forms available online, or utilize an organization like Consumer Credit Counseling Services that offers an educational process to learn budgeting techniques. "We offer classes in budgeting (some at no cost) to help newlyweds get the help they need," Chupik says. When's the best time to start a budget? Right now. Because the sooner you begin communicating about your household finances, the sooner you'll see the rewards of budgeting. And that's one less thing you'll have to worry about in the years to come.

From the honeymoon to the homefront Here's some suggestions for budgeting success from Debby Fowles, www.about.com's financial planning "guru":

1. Set up income and expense categories to track. Include basic categories such as housing, utilities, insurance, and food plus categories that reflect the way you actually spend money (hobbies, habits, etc.). Become more aware of where your money goes so you can make conscious decisions about spending.
2. Calculate your average monthly pay and any other income. Next, go through your bills for at least the last three months and list monthly expenses. To come up with your monthly budget for each category, list your actual expenses and set spending levels that will enable you to save money. When you have a better grasp on your spending, you can look for ways to reduce many of these expenses later.
3. When you've identified and listed monthly estimates for your budgeted amounts, record your expenses and your cash expenditures. Subtotal the income and expense categories and subtract the total expenses from the total income to arrive at your net income. If you've recorded all of your income and expenditures for the month, this will be the amount of money you have left over for savings, emergency funds, etc.
4. Set goals and make adjustments. After you've tracked your actual spending for a month or two, you'll be better able to identify where you can comfortably make cuts and adjustments to start saving money. Once you've got the budgeting process in place, brainstorm about ways to reduce spending in specific categories, and set realistic goals.