Stop lying to yourself.
Yeah, you ? the one holding the newspaper.
You know you spend more than you should. Your money disappears faster than Oriole playoff hopes. So stop lying about it.
Maryland already takes tons from your wallet. The Tax Foundation ranks Maryland 15th highest for state tax burden ? and that?s before the O?Malley gang takes even more. With the special legislative session considering doing just that, it?s important to get your own fiscal house in order.
There?s only one way short of winning the lottery ? budgeting. It sounds scary. Even the government can?t do a budget right. But it?s easier than you think. And the payoff is like they used to say on the game shows ? “big money.”
You don?t need Quicken. You don?t need a tax program or even an accountant.
All you need is a notebook and a pencil. And time. (A spreadsheet like Microsoft Excel helps, but it?s not mandatory.) This isn?t an all-inclusive guide, it?s just a beginning.
First, list the categories of things you spend money on ? food, clothing, transportation, your bookie, whatever. If you need help coming up with more, try the Internet or library. Make sure you put savings as one section. Now estimate (guess) how much you spend each month on them.
No, it?s not that simple. Now that we are into November, its harder. I want you to track every dollar you spend the whole month. Every penny, even. At the end of the month, place every penny into the categories. Create new ones if needed. Spend $20 at a bar watching the Ravens? Put that in dining out ? or maybe medical, the way Billick has been coaching. Buy stamps to send me hate mail? Write it down.
Then you will know how much you spent. Compare it to your paychecks for how much you actually earned.
Scary, huh?
I bet some of your estimates will be way off, but that?s OK, it?s only one month ? a partial one at that. Try again in December. Track everything you spend and compare it. Those two months will help you estimate a whole year?s worth of expenses.
Here?s where it gets tough. Many of you spend more than you earn. That has to end. Today. Your name isn?t O?Malley, so you can?t just soak others because you can?t keep from spending. That leaves you with two choices ? spend less or earn more. Try both. Work a part-time job. Turn down the heat a degree. Walk to the store.
Earn. Save. Track. Repeat. It gets easier, the more you do it.
Use the budget to decide if you can afford something ? don?t just buy it.
Use the budget to make sure you are saving some money for the future.
Tracking what you spend and sticking to a budget are a big step on your way to financial freedom. If you track it, you can?t lie to yourself. Just like the guy on the $1 bill, money doesn?t lie.
Now it?s your turn.
Dan Gainor can be seen each week on Thursday afternoons on the new Fox Business Network. He is the T. Boone Pickens free market fellow at the Media Research Center?s Business & Media Institute, a career journalist and media commentator. He can be reached at [email protected].
