San Diego, CA. There is always much talk
about the need for Americans to get on a budget. Setting up a monthly
spending-plan, after determining the basic totals of monthly income and
outgo, is the easy part. The hard part is getting a spending-plan
implemented. The best basis for drafting and also implementing a
spending-plan is based on frequency of income.
Here are some simple steps to take in preparation for setting up a
1) List on a separate sheet of paper all sources of monthly income
including gifts, bonuses, tax refunds, cost of living increases, dividends
and interest income, etc. Note the frequency of each source. Total up all
sources of monthly income.
2) On another separate sheet, list all monthly expenses. Expenses should
be separated into two categories: fixed and flexible. A fixed expense is
one that remains the same each month such as a mortgage or rent, a loan
payment, insurance premiums, an amount of money set aside each month for
such things as gifts, motor vehicle maintenance or clothing and uniforms,
for example. Total up fixed expenses. Flexible expenses are those which
are directly controlled. These include household and grocery items,
utilities, entertainment, meals away from home, out of pocket expenses,
etc. Total up flexible expenses.
3) After all expenses are totaled, then subtract the expense total from
the total income figure for the month.
4) Divide total expenses by the frequency of income or the number of
paychecks the household receives each month. The answer will reveal how
much to set aside from each paycheck to cover the monthly expenses.
(Note: If the expense total is greater than the income total, then you are
out of kilter financially. Begin to prioritize expenses by noting every
expense for which credit will be utilized in order to keep in the plan.
Then ask yourself if you want to borrow every month for each particular
5) Review the spending-plan each income period and update annual spending
plans quarterly. Above all, it should reflect your values and it must be
flexible to match your life-style. A spending-plan will free some from the
slavery of overspending without saving. For others it
could will bring order and new priorities.
To get the plan implemented, begin with the very next paycheck. If it
takes a good portion or all of the next check to cover one or more major
expense that is due, try to begin by setting aside at least ten percent of
the total monthly expenses with this check. If needed, set aside ten
percent for the next ten paychecks until you have and entire month's
income saved and ready to implement the budget.
For information about
monthly budgeting guidelines, and
warning labels for your charge cards, visit the ICFE's Web page at:
If you would like a printed copy, please send $1 to the
ICFE and ask for: "Money Helps"
The information packet includes:
1) "15 Tips to improve spending Practices";
2) "How to set up
and implement a spending-plan";
(plus a budget worksheet)
for personal and/or family finances;
3) "Dealing with
4) "Steps to
take to reduce indebtedness";
5) "How to
spend smarter for household and grocery items," and a
Profile" which helps people identify dangerous spending habits.
Money Helps" is available on the Internet free or by sending
send $1 AND a self-addressed, stamped (60 cents) # 10 envelope (SASE) to:
ICFE Money Helps
PO Box 34070
San Diego, CA 92163-4070
About the ICFE:
The Institute of Consumer Financial Education (ICFE),
founded in 1982 by the late Loren Dunton - creator of the "certified
financial planner” (CFP) designation - is dedicated to helping consumers
of all ages to improve their spending, increase savings and use credit
more wisely. The years between 1984 and 2000, the ICFE was also known as
the National Center for Financial Education (NCFE).
The ICFE is a nonprofit consumer education organization that has helped millions of people through its education programs and Resources. Over
one million "Credit
/ Debit Card Warning
Labels” and "Credit
/ Debit Card Sleeves” are in circulation world wide.
The ICFE's on-line help for consumers who spend too much
was featured in PARADE Magazine (June 9th, 2002) in the Intelligence
Report section. The money helps and tips are from the "Money
Instruction Book," a course in personal finance, which was completely
revised and updated in 2002 and is positioned to become among the premier
programs in the new bankruptcy and debtor education initiatives.
The ICFE's "Do-It-Yourself Credit File Correction
Guide," now in its Twelfth Printing, is in use by thousands of consumer credit and debt
counselors in addition to tens of thousands of consumers. It received a
"buy” rating in July, August and November from nationally syndicated
financial columnist, Humberto Cruz in his column, "The Savings Game".
BottomLine Personal newsletter gave the Guide a "Send For” rating in
September 2001. The ICFE and our do-it-yourself approach to credit file
correction was featured on NBC Nightly News on 04-30-02. The Spanish
edition of the Guide premiered in January 2002. Syndicated columnist,
Robert Heady also gave the ICFE Guide a "buy” rating.
The ICFE Web site at: www.financial-education-icfe.org helps consumers with
mending spending, learn about the
proper use of credit, budget and expense guidelines, how to set up and implement a
spending-plan and also access financial education courses and videos and how to
teach children about money. Other ICFE services include a
free eNews, and an
on-line resource center of financial education
learning tools, including videos, books and personal finance courses.
Consumers may learn more on the Internet about the "Do-It-Yourself
Credit File Correction Guide" here, or fill out our request
form, indicating your areas of interest.
For more information contact Paul S. Richard ICFE Executive Director at 619-239-1401.