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Focus on finance: Focusing on budgets

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Column by Frank Anderson

Question: I need help on saving money. I’m terrible at it and I’m tired of being broke. Help, please.

Answer: Many people have this problem, so don’t feel alone. Regardless of your resources, the first step to saving money is making a budget. You have to first record all your expenses for a month and see how you are spending your money. If you are spending more than your net income you will have to cut your expenses. If you want to save for a $1000 emergency fund — which you need — you must have a margin in your budget. A margin is the amount of money you have left after your expenses. You should save 10 percent of your income as a habit. You will probably have to cut many items. The most common areas for reduction are eating out and cellphone charges. In short, it takes discipline over a long period of time to save consistently. Good luck in your adventure in saving.

Question: We are a two income family but we have separate bills. He pays the mortgage and some utilities and I pay medical and auto insurance and some utilities. We split groceries and have separate accounts. His financial situation is better than mine. He brings home more money and I am always borrowing or struggling to stay with my nose just barely above water. How do I even start a budget when I’m so far behind?

Answer: Because you have chosen to manage your family finances with separate accounts you have made the financial situation of your family very difficult. To be successful as a family, you have to have a family budget. Both of you need to sit down and make a list of the family’s expenses and resources. Then the difficult part begins. Because you have chosen to keep your finances separate, you must decide who is going to make what payments and when. Annual and semi-annual expenses must be paid by someone, so you have to work these out and agree who is going to pay them when due. Both of you will have to be committed and patient to make this work. In our 47 years of marriage we always have put both our incomes together and had one budget. I usually have paid the bills, but my wife has done it at times and done it very well. She managed the family finances during the year I was in Vietnam and did so very well. However, my income was, except for a few years when my wife worked, the only income. Now we both draw Social Security and it goes in one pot and all expenses are paid from that money. We discuss if expenses get out of budget and trust each other to keep expenses in line. Good luck as you work together to make a family budget.

Frank Anderson is a successful retiree who lives in Hardin County.

 

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A panel of local experts with experience and knowledge of this community respond to questions about 401(k)s, 403(b)s, annuities, certificates of deposit, home mortgages and/or refinancing, investing in the stock market, financing retirement, reducing income taxes and related topics. Email your questions to: focusonfinance@thenews enterprise.com or mail to: Melanie Parker, The Wright Legacy Group, LLC, 1104 Julianna Court, Elizabethtown, KY 42701.