VOL. 128 | NO. 164 | Thursday, August 22, 2013
Rays of Wisdom
Dana and Ray Brandon
Your Budget May Need Revising
Ray’s Take No one ever likes it when I use the “B” word, but there’s a reason I do it.
A budget helps you achieve your goals in life, whether they’re for a luxury vacation, the kids’ education, or retirement. Without one, you don’t really know where you are financially, much less where you are headed. You are out of control. There are a lot of smart, hard-working people scheming this very instant on how to separate you from your money. The best ones even make you think it was your idea!
However, going through the budgeting process is not a one-time thing. Every time something changes in your life or financial situation, it’s time to re-evaluate that budget.
Say you get a raise, even a modest one. That might be the time to set aside more money for paying off bills or maybe increase the amount you’re saving toward a new car. The goals are yours to determine, but it’s up to you to determine them. If you don’t make a conscious effort to make that decision, it gets made for you. Capitalism abhors a vacuum.
Your budget should be revisited when your expenses change: paying off a car note; altering your mortgage payments; when your family increases or decreases in size. Anytime your income rises or falls, it’s time to revise the budget again. This is true even if that increase is from a one-time windfall or inheritance. Deciding how to save or spend that money has a huge impact on your financial picture.
Finally, make sure your budget is keeping pace with your changing goals. If your goal is to pay off debt, then your goals – and your budget – need revising once that happens.
If you don’t have a budget, make one. If you do, take a look at it and be sure it reflects the goals you want to achieve.
Dana’s Take Be sure to include your spouse in the budget making and revising process. That’s a critical step to making sure your goals are in alignment. If the word “budget” makes your spouse run and hide, substitute “savings goals.”
What if one of you hopes to become a full-time homemaker while the other one is planning on two incomes for life? That would have a major impact on your plan, not to mention on your future relationship.
If one of you is expecting to get a new vehicle soon, both of you need to be planning for it. If one partner has already priced out the cost of a media room, both partners need to see how that works into the plan.
Creating a savings plan is all about short-term and long-term goals and expectations. Since you want the best for each other, do it together.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife Dana has a Bachelor’s in finance and is a Licensed Clinical Social Worker (LCSW). Contact Ray Brandon at firstname.lastname@example.org.