Budgeting Tips from CNN Money

June 10, 2009

Budgeting. We all know what it means, but do we do it? Maybe we think we are, or maybe we intend to, but never get around to implementing it. Or, maybe, we don’t know how to budget at all.

Budgeting is especially important in this economy. Making each dollar count and ensuring all of our bills are paid, on time, is crucial. So how do you do it if you’ve been laid off or are just having hard times? According to a recent Money poll, in light of the financial crisis, 89% of us are changing the way we manage our finances, and 88% plan to be more frugal.

In a recent article, CNN Money offers alternative ways of implementing a family budget. Here is one example:

THE BUCKET BUDGET
How it works: You’ll need three bank accounts – two checking, one high-yield savings. First, figure out how much of every paycheck you want to put toward savings. Have that automatically sent to the savings account, which serves as a future-goals way station; you can redirect it later.

Send the rest of your paycheck to checking account No. 1. (Talk to your payroll department to set up multiple direct deposits.) From this you’ll pay monthly fixed expenses, such as mortgage and utilities; set up automatic bill payment online.

Figure out your monthly surplus in this account after recurring bills, divide by four, and set up a weekly automatic transfer for that amount to checking account No. 2. This is for variable expenses like groceries, entertainment, and eating out. Two rules: You can’t transfer more money over until the next week, and you can’t use credit cards.

If you want more budgeting ideas, definitely read the article.

And if you need help opening accounts, remember you can always count on MCCU to be your financial partner.

Questions or Comments? E-mail me at blogger@matadorsmoneymatters.com.

Posted in Tips