The Community News
By Adam Zewe
The holidays are the season of giving, but when those post-Christmastime bills roll in, visions of sugar plums can be quickly replaced with visions of bankruptcy.
But it’s never too late to start living on a budget, according to Barbara Reed, director of housing and financial management at the West End Neighborhood House.
West End provides budgeting and financial literacy seminars for everyone, from those with meager incomes to families earning more than $100,000 a year, she said.
The organization helps people live within their means, which is a vital lesson for many of the families visiting West End that have recently had their incomes reduced, she said.
| Financial habits by the numbers
A survey for the National Foundation of Credit Counseling found that Americans have the following financial habits: 40 percent use monthly budgets |
Here are five things everyone should know about living on a budget.
1. Write it out. There’s no substitute for a good written budget, Reed said. The mistake many people make is to list their obvious expenses, like rent and utilities, but forget about incidentals like a daily newspaper or cup of coffee, she said. Those small expenses add up in a hurry and need to be spelled out on a budget.
2. Get a fix on expenses. An important step to making a good budget is turning as many variable expenses as possible into fixed ones, Reed said. “It’s hard to make a real stick-to-it budget if your bills go up and down,” she said. Many companies offer fixed billing, like budget billing from Delmarva Power, she said, and things like cable bills can become fixed expenses if you stop paying for extras like movie rentals.
3. Shop around. Just because you’ve had the same cell phone plan for the past 10 years doesn’t mean it’s the best plan for your budget, Reed said. Many people also inherit insurance plans and banks from their parents, she said, and never give their bills a second thought. But your parents’ insurance plan may not be the most cost-effective for you, she said. “We believe the only thing your parents should hand you down is your genes,” she said.
4. Needs vs. wants. If there’s a big ticket item that you want, but don’t necessarily need, budget for it instead of buying it now and paying for it later, she said. Putting away $20 a month for a $1,000 purchase is a much more budget-friendly method than buying something with $1,000 of credit and having a variable credit card bill to deal with, she said.
5. Talk to an expert. You go to a dentist when you have a toothache, Reed said, so why not take advantage of a free financial literacy seminar when you’re trying to stick to a budget? West End offers a variety of free programs, from financial literacy groups to affordability workshops to focus groups, she said. Their financial focus group meets on Jan. 22 from noon to 2 p.m. and they’re holding an affordability workshop on Jan. 13 at 6 p.m. For a full listing of West End’s free programs and services, visit westendnh.org or call 658-4171.