How do you develop a budget?
There are four simple steps to establishing a livable, realistic budget. Determine your total monthly income, including all interest, dividends, bonuses and net pay from paychecks.
Second, list all of your fixed expenses. Be sure to include your savings account deposit in this total. Most fixed expenses come to mind easily. But don't forget membership dues, real estate taxes, church and charity contributions and personal allowances. Consult your checkbook register for the past several months to make sure you're not missing anything.
Now compare the total income with the fixed expenses and savings. The difference between the two is the amount that can be used for flexible expenses.
Finally, you must figure what you realistically will spend for such items as food, clothing, household services and maintenance, medical and dental care, recreation, vacations, gifts, personal care, and all other expenditures that a family finds itself making daily or monthly.
Additional tips:
Be honest with yourself. Ask yourself some tough questions. Many budgets fail because we set up a plan that looks good on paper, but has little relationship to the way we're actually spending our income. It is vital that you have all of the amounts down on paper as you make up the budget, so that you know what amounts you're dealing with. The pruning of the budget can come later.
Include the entire family in the budget making process. All family members are more willing to adhere to the budget if they can take ownership for the development of it.
If you're lucky you will have enough money to pay for all of your expense listed. If not, you'll have to prune down some of the items, perhaps sharply, and you may have to omit some items all together. Even if you must cut down, at least you will know that you are managing your money and your money is not managing you.
How much debt is too much?
The answer to this question depends on many factors- your personal situation, your income, and other expenses and obligations. When you are shouldering too much debt there are warning signs. Here are a few to watch out for:
You tend to be late paying bills. You "shuffle" them around, paying some one month and others the next.
- You are at or above your limit on your credit cards.
- You take out a new loan to pay off old ones, thereby extending the payment time.
- You're spending more than 20% of your take home pay on debts other than your mortgage.
- You don't really know how much you owe.
If these danger signs are already starting to show, now is the time to start working on the problem. (To learn about how CCCS can help, click here.)
How can I prevent becoming a victim of credit card fraud?
The most effective way to prevent becoming a victim of fraud is to protect your card at all times. Here are a few things you can do:
Carry very few cards with you. Leave the others at home, so that if your purse or wallet is lost or stolen you have very little to worry about.
Keep track of when new and reissued cards are due to arrive, and call the issuer if they don't come on time.
Never lend your card to anyone. If you want to put someone else's purchase on your card, you make the transaction.
Keep in mind that when you add other people's names to your account, you will be responsible for any of the charges that they make.
Always sign your card in ink, as soon as you receive it. At stores, associates should always compare your signature on the sales slip with that on the card.
At stores or restaurants, check your card when you get it back. It's easy for busy waiters or sales people to give you the wrong one.
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