The Gimme Generation

Dear Susan,

You know how Uncle Tom gets the Wall Street Journal every day. Well, yesterday he handed me this special section and said, “Look at that, what an appropriate title!” It was headed up, “The Gimme Generation.”

They hit the nail on the head as far as the last 30 years are concerned. True, there have been ups and downs in the economy; but overall, there has been a steady rise in incomes and expenditures. In many cases, however, the expenditures have risen faster than the incomes and that has created real trouble in a lot of families.

Start a budget now

Since you and John just got married and have the opportunity for afresh start, I thought I’d pass on a few pointers about finances that we have learned over the years.

You probably won’t have trouble meeting your expenses at first. You’re combining two incomes into one household and will find your combined expenses are less than those for two single people. But don’t let that deceive you. In a short while, things could change, especially if you are blessed with children. I would recommend you work to a family budget right from the start so that you’re already in the habit when finances tighten up.

To set up a budget, break your expenses into the main categories of food, clothing, shelter, transportation, donations and miscellaneous. Under each category, figure out what your expenses are now. Make sure you don’t forget the infrequent items like car insurance or birthday presents.

You’ ll probably have to work on a monthly basis because that’s the way utilities, phone, car and house payments work. This gets a bit tricky as food and supplies will follow more of a weekly pattern so you’ll have to do a little juggling. On the infrequent items, allocate enough each month so that you have the money available when the expenses come up.

Don’ t figure your first try at allocating expenses is cast in cement. You might well have to make adjustments if the total expenditures exceed net income or if you find yourselves constantly going over or under in some categories.

Making a budget work

Discipline and honesty are the two keys in making a budget work. The discipline comes in recording every expense and in having regular review sessions. The honesty is with yourselves –first, in recording all the items and second, in facing up to what really is a necessary purchase.

I stress the nickel, dime and penny amounts because that is one of the keys to successful budgeting. A lot of couples nickel and dime themselves to death by letting small amounts of money just trickle through their fingers. They go to the mall with $25, come back with $2, don’t remember how they spent the $23 so assign it to miscellaneous expenditures. That’s fatal! Make yourselves face up to spending $3 on pretzels, $5 on cosmetics, etc. Only with that kind of discipline will you really uncover the holes in your spending patterns.

Record expenses (record charge card expenditures as if you paid cash) as close to when they happen as you can. This is normally upon arriving home. We found it useful to have a chart inside a cupboard door which had the major categories broken out with room for a brief description, the amount and a running monthly total. The running total proved particularly useful as we could tell at a glance where we were for the month in that category. We had the target figure written at the top of each section so we could compare actual with budget as we went through the month.

Another area of discipline is in forcing yourselves to have a regular review session. We found once a week was good for the first month or so, then we went to twice a month and finally once a month as we got better at keeping the budget. The need for honesty with one’s self is critical when you review what you actually did.

One of the things Uncle Tom learned in business is that you had better face the facts or you’re liable to go bankrupt. That applies in the home as well.

Lots of couples will not admit how much they are spending on non-essentials. As a matter of fact, this is how most believers get themselves in financial trouble. After all, God promises to take care of our necessities (Matt. 6:26,30-33). Usually He does that by providing enough income so that, if we use it right, we have enough to get by. Our problems come when we spend money on a lot of things we could do without.

There is areal tendency to rationalize in this area. Either we say we really need what we don’t, or we excuse ourselves because others are buying it or we plead ignorance about where the money went. When it comes down to ourselves and our budget, however, who’s kidding who?

There will be a tendency for you to point out John’s waste and for him to point out yours. This is good, in that you will probably be more objective about the other person than you will be about yourself It can be bad, however, if it leads to hurtful criticism and arguments. You can minimize that danger by both being gentle to the other and by both being ready to admit when you bought something you really didn’t need. A sense of humor helps, too, if you can chuckle at your trying to explain how a double dip cone was a necessity.

Some common pitfalls

Watch out for fixed expenditures. A bigger house, for example, may look affordable but there is no flexibility in the payments for mortgage, taxes and insurance. What looks affordable today, may not if you’ re hit with some unexpected car repairs or medical bills.

Allow for the unexpected. Of all people, we should know that God will bring trials into our lives. Everything will not go along smoothly. If you have no savings built into the budget, you will have added difficulty when emergency expenses occur.

Don’t use shopping as entertainment. Wandering through the malls exposes you to enticements that are hard to resist. Decide what you want to buy before you go out; get it and get out of the store so you are not tempted overmuch.

There are other things you’ll note as you go along. In addition to controlling expenses, you can also increase income. But that is another story about which I’d like to share a few thoughts another time.

Much love,
Aunt Sarah