The Skinny on Spending Plans.

I’m going to say a word so filthy I don’t even know if I’m allowed to use it in a public forum….Budget. Disgusting, I know. Aside from being on a diet, there is nothing I hate more than having to make a budget on where all my money will go (or not go, depending on what’s on sale). It’s the dread of knowing what you can’t have. Quite similar to the feeling of dread I get each time I walk up to my mailbox and see just bills, why can’t we just send letters and cards instead? Since I am a grown up and all, I have no choice but to budget because my landlord doesn’t accept sisterly love as rent. How I miss the days of just getting allowance and spending it happily on frivolous things like gum balls and ice cream.

I read an article in The New York Times that talks about how to make a budget less like a diet, in essence, effective. The two main things budgeting and dieting have in common is the focus on restrictions and no fun. Boo!! Who wants that? To make a budget work you need to implement a name change. Ditch the word budget and go with spending plan. Sounds fancier and it doesn’t make my body instantly heave. Make sure your spending plan has a goal or purpose like saving up for that amazing trip to Europe or new car. Having something to look forward to makes saving more rewarding.

Now if your just budgeting to get your bills in order make sure you always have cushion cash. You know, that secret in-case-of-emergency fund. That way if and when something happens you won’t derail your actual budget and can handle the cost of getting those new brakes fixed. The best idea is to make sure you create several funds or accounts. You need to separate your spending cash from the bill paying cash.

Another awesome fact in the article was the smart wallet. John Kester, a product designer at M.I.T., created a working prototype of a wallet that becomes harder to open as your spending limits get reached. It works by placing a hinge in the middle of the wallet which is wired to your bank account via a Bluetooth connection from your cell. So as you spend, the wallet gets harder and harder to open. You can plan to put aside at least 60 bucks in your spending plan for the smart wallet when it finally hits the market in the near future. 

Here at GAI (www.gunwel.com) we want to help you keep your spending plan in order by handling all your tax and bookkeeping needs. Call us at 212-979-6830 or stop by and visit!!