By Crown Financial Ministries
Budget busters – areas that can result in financial disaster.
(The following percentages are for a 4-member family with an annual gross income of $130,000 or less. Net Spendable Income (NSI) is money available after tithe and taxes.)
Housing (38 percent of NSI)
- Don’t buy or rent a house you can’t afford – total housing includes mortgage, taxes, insurance, utilities, phone, and maintenance.
- Don’t finance closing costs or secure a second mortgage for a down payment.
Food (12 percent of NSI)
- Plan and stick to written weekly menus.
- Don’t shop when hungry or hurried. Do shop specials, store labels, and use coupons.
Automobile (15 percent of NSI)
- Buy quality used cars you can afford, and don’t trade in before car’s usefulness is over.
- Auto price, maintenance, gas, tags, taxes, and insurance are all part of cost.
- Consider dropping collision insurance on cars more than four years old.
Debt (not housing or auto – 5 percent of NSI)
- Establish a payment schedule to pay all creditors regularly, and get rid of credit cards that you can’t pay in full each month.
- Sacrifice wants and desires – buy with cash until debts are current.
Insurance (5 percent of NSI – if your employer provides medical insurance)
- Find a well-informed, trusted insurance agent to get the best possible provision for the money.
- If you have no medical coverage through employment, consider major medical insurance – it can covers up to 80 percent of medical expenses due to catastrophic illness or injury.
Recreation/Entertainment (5 percent of NSI)
- Recreation-oriented Americans, who are in debt, shouldn’t borrow to entertain themselves.
- Plan vacations during off seasons, select local vacation destinations, consider camping.
Clothing (5 percent of NSI)
- Save money and buy without using credit.
- Purchase off season if possible, and select home washable fabrics and outfits that can be used in multiple combinations.
Medical and Dental (5 percent of NSI)
- Prevention is cheaper than treatment.
- Teach children to eat the right foods and clean their teeth properly. Good diet, rest, and exercise will most likely result in better health.
- Ask doctors and dentists in advance about costs, shop for prescriptions, and ask for generic drugs.
Savings (5 percent of NSI)
- Without savings, the use of credit and debt becomes a way of life.
- Use payroll deduction for savings. If it’s not available, your bank can automatically withdraw from checking account to savings.
Remember budgets don’t operate on auto-pilot, they require effort and family understanding. If you’re determined to achieve and maintain a debt-free lifestyle, then living on a budget is essential. Don’t bust your budget.
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