Sunday, July 31, 2011

Balancing a Budget

Have you ever balanced your budget?  Do you know what I mean when I say that?  It is something that is completely simple on paper, but so hard to actually do sometimes.  When you write out all of your bills and compare it with your income which number is bigger?
It should be your income or there is a problem - that is a no brainer.  But, if it is your expenses that is a bigger number then you know you have to do one of two things:  decrease spending, or increase your income.  Again, those are easy to say, but hard to do.  If you decide to decrease your spending you may have to give some things up that you don't want to: cable, shopping, extravagant vacations, a car payment that is 40% of your net income!, etc...  But, on the other hand, if you decide to keep your spending as is and raise your income that can also pose problems, the biggest being less time with family and friends.

My point to this is, as responsible adults we see that the only way we can survive is by having our family income exceed our expenses (including short & long term savings) and we make hard choices to make that happen.

I am not really a politically driven person.  I don't vote political parties, I vote for people - but not because I agree with them; I vote for a person because they agree with me, so I am not about to sit down and bash an entire party.  That being said, if we can all be responsible about our budget, I think we should be able to expect our country - starting with its leadership - to be responsible about their budget.  I know there are hard choices, but really it comes down to the simple statements I made at the beginning.  If expenses exceeds income you have to:

1.  Cut spending


2.  Increase income

These are the only two valid options I can see to balance any budget.  I know that either choice will not be a popular one for everybody, but I am going to repeat myself - "the only way we can survive (as an individual, family or country) is by having our income exceed our expenses."  That is for any budget: personal, family, business, or even country.  I don't really see the huge problem our country is having.  It seems like if all of the people in charge of our countries budget would listen to Dave Ramsey for a while, we would be in much better shape.

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