Monday, October 27, 2008

Damned by Debt DON'T to be Afraid!!!!!!

I was reading JD’s blog, getrichslowly, this morning and he was writing about a new book that has taken a lighter approach towards budgeting without the boredom that follows along with it. I agree that the balanced approach highlighted in the book makes it easier for rookies or people damned by debt not to be afraid of the word “BUDGET”. After reading his review of the book, I realized that the book and folks like me have one thing in common – WANT. As per JD, the book describes the HAUNTED word WANT as a good one for the first time in any finance journal that I have read. I am at a place where I am today is not because I like the word –WANT but I have attached too much of myself to it. So, all I have to do right now, is to balance out the attachment of the daunted word to myself and I will have it going. Sounds pretty straight forward isn’t it. JD, quotes from the book that we have to spend 50 % on Needs which includes housing, utilities, bills etc which should be paid before we even think of the word entertainment or saving. 30% to Wants and 20% towards Savings. The authors say this simple rule will set us on the path to freedom. I really liked the way they put it. Sounds easy on money slackers like me. If I were to spend my income according these authors, this is how it would look like:

Income: $4300

50% twds Needs - $2150
30% tads Wants - $1290
20% twds Savings-$860

Where in as of now, this is how my income is spent:

90.47% twds Needs - $3890
2.32% twds Wants - $100
6.39% twds Savings - $275

This is because I have $12,000 in debt that I am knocking off right now. I should agree that looking at my budget, I get a bit stressed but looking at the balanced budget suggested by the authors from the book JD mentions I feel more relaxed and happy. More so because for once I can see a WANT category in the budget without being guilt ridden. It’s actually been a positive reinforcement on me. Thanks JD, for this article,

Let me know how you guys matched up against the Balanced Budget

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