Basically there are three ways to manage money:
1) Spend it
2) save it, or
3) give it away.
Let us first discuss how to spend money wisely.
If the Great Recession has highlighted nothing else, it is an estimate of how income will be used, whether by sn individual, a family, a business, or a government.
A Family Project
How can you plan a budget? “All family members,” says the book budgeting, by Denise Chambers, “should be included in drawing up the plan so that all have a commitment to the family budget.” Periodically, all should get together to see how their budget is working. Creating a successful budget can become a rewarding family project as each one finds ways to live within the family’s income.
To work out a budget, some people use a computer program. Others simply use s pencil and a sheet of paper, which they divide into two columns. One column for income, and another for expenditures. It is also important to include in the budget amount to cover once-a-year expenses, such as income tax and perhaps a vacation.
A time-tested budgeting is based on the use of envelops or folders labeled “food,” “Rent,” ……and so on. In the past, people put cash for those expenses in the envelops each month. Now many feel it is safer and easier to deposit money in a bank account and withdraw it as needed.
Jonathan and Anne, who lived in South Africa with their two daughters, often use the folder method of budgeting. “If your salary is deposited in a bank account,” says Jonathan, “it is just as important to be strict about how your money is divided. For example, if you run out of your monthly allowance for meat, then you should not take money set aside for saving to buy more meat.”
The choice is yours ……..
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