• Paula Anderson

It's better to budget sooner than later...

by Paula Anderson

Budgeting is a pain because you want to spend without having limits. You see a pair of shoes, a nice pair of blue jeans, new computer gadget or the latest fashion piece and say, “I’ve got to have it now." If you can afford it, then there is nothing wrong with buying the latest gadget. The trouble starts when we live beyond our means.

For many people budgeting is not something that we get excited about doing.

According to the article, “Personal Budgeting: What are we trying to do?” budgeting can be viewed as a constraint. It denies us the pleasure of buying what we want. We look for instant gratification. Mario Powells, certified public accountant, says that “people are not disciplined when it comes to budgets and they are impulsive.”

Powell also says that budgeting can be taught when children are responsible and when they start to receive an allowance. Budgeting is a way of planning and having control over your finances. Many times children learn money management principles from their parents. Powell recommends that “parents set an example.”


As college students accumulate student loan debt, they need to have an understanding about budgeting too. Tuition, housing and living expenses can be overwhelming for a student.

Harold Smith, financial services agent, advises them to use the 80/10/10 rule when they graduate college. He recommends that college students pay themselves first, contribute to a charity and/or tithe and use the rest for monthly expenses. Additionally, he said students need to “live within their means.”

There are many tools that can be used for budgeting. An Excel spreadsheet or software can be used to track your expenses. The budgeting process begins with listing your expenses and income stated Powells.

This helps you to identify your spending resources. Planning for expenses also requires you to create an emergency savings fund. Smith recommends that you cover expenses from six months to one year in the event of a job loss or other emergency.

He also says that an emergency fund, checking and saving accounts are less risky investments. Saving does require discipline and determination and he recommends that a person save for 90-180 days and then track their results.

Saving is about rewards too. Smith stated to buy something that you want, but don’t go overboard. Once a plan has been established; college students need a financial review on an annual basis. They can read books, articles and seek out people who are willing to share said Smith.

Well-known, financial advisor, Dave Ramsey says that handling finances is 80 percent behavior and 20 percent knowledge. Smith agreed with his theory and stated that both have to be done to accomplish your financial goals.

Too much debt can cripple your finances. Mario Powell stated that college students should “limit their liabilities” and don’t get a lot of credit cards when in school.

To learn more about financial planning, contact Operation Hope, Inc.

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