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A simpler way to save: the 60% solutionHow many of you have tried budgeting and think it's a waste of time? Come on, let's see those hands. OK, that's just about everybody. I've kept a budget of one kind or another, first on paper and then with the help of various software programs, for about 20 years -- despite a strong suspicion that I was wasting my time. The illusion of control, I argued to myself, was better than none at all. My approach to budgeting was to carefully track my spending during the month and to adjust my budget targets up and down in each category, so that my total expenses never exceeded my income. Laborious? You bet. Useful? Sometimes. Anal-compulsive? Probably. After two decades of this, though, I started to wonder if there isn't an easier, more effective way to budget. I realized that the hardest part about keeping a budget is getting useful information from it. There's too much detail and not enough bottom line. My answer is "the 60% solution," a faster and easier way to structure your budget without having to account for every penny. What you're trying to do with a budget is to prevent overspending, which ultimately leads to piling up debt. Contrary to the way most people budget, however, it rarely matters what you're overspending on -- dining out, entertainment, clothes. Who cares? It's still debt, right? Looking at my own spending history, I realized that it wasn't the little luxuries here and there that got me in trouble. It was the large, irregular expenses, like vacations, major repairs and the holidays that did all the damage. To avoid overspending, I had to do a better job of planning for those. And then there were the really big expenses: buying a car, putting a down payment on a new home or putting a new roof on an old home -- all of which can run into the tens of thousands of dollars. They also can often be postponed, sometimes for years, which theoretically should give me a chance to save for them. Understand your committed expenses The key was a drop in our fixed monthly expenses. It was a period when declining interest rates had lowered our adjustable-rate mortgage payment to about 15% of our household income. That left us with some extra money each month to set aside in a savings account for those irregular expenses. We later moved to a bigger house with a much bigger mortgage payment, higher maintenance costs and utility bills, and obscene property taxes. The monthly mortgage payment was only 20% of our gross income, far lower than the 33% that most lenders will allow, but, suddenly, we were struggling again. Even after refinancing our mortgage at a lower rate, we were still often running out of cash before the end of the month. I realized that other fixed expenses had crept upward over the years. As my children, Natalie, now 16, and Jackson, 13, have gotten older, they need things like music lessons and sports equipment that add several hundred dollars a month to our basic expenses. They’re also outgrowing clothes faster than we can buy them. Continued at http://moneycentral.msn.com/content/Savinganddebt/Learntobudget/P36153.asp FinancialBad Credit Auto Loans - Auto loans for people with good and bad credit via a nationwide alliance of car dealers. Small Business Loans - Small Business Loan Packages Administration Government Loans. Bad Credit Auto Loans - Network of dealers providing new and used auto loans. Call Center Services - Personalized Communications offers dynamic call center solutions for your company including inbound telemarketing, 24 hr a day order taking, order access, voicemail and many other services. Let us build a plan tailored to your needs. MLM Home Business MLM Part Time Work Opportunity MLM Earn Extra Income Work Home - MLM Multi Level Marketing Part Time Work Home Business Job Home Business Opportunity Idea Internet MLM Home Business Financial Freedom MLM Earn Extra Income New Car Loans - New and used car loans for people with good and bad credit. Payday Loan - Personal Cash Advance provides secure, online cash advances and payday loans, with rapid cash transfers and friendly customer service Bad Credit Personal Loans
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