Thursday, February 26, 2009

Hey Washington DC - This Is How A Budget Works!

My fellow Americans, I want to share with you the principle of budgeting.  You hear the word budget used all the time by politicians; in reality, they have NO CLUE what a budget is!  See, a budget is something that helps you know how much money you have and what you can spend it on, so that you don't spend more than you have.  The government does nothing of the sort, and I am offended by their use of the word.  They should call their "budgets" something else, like "ridiculous and unnecessary spending plans".

Above is a screenshot from our family's budget program - which I wrote myself - showing our food budget since I got the program up and running at the start of August.  We sat down to look at things when we decided we wanted to get into a house, so we could make sure we were saving plenty.  Look what we found - in September, we spent almost $600 on food!  We looked more closely, and saw there was some emergency spending when we stockpiled food in case Ashley's family had to stay with us during hurricane Ike.  But still, we saw this as an opportunity to save.  So we set our target for food (under $400), and set some rules to get us there.  And look at the results!  We're down around $300 for the last 3 months.  We still eat out, we still go on dates, we just became more conscious of what we buy and make the most of what we do.

As a result of doing this for all our expenditures, despite paying for plane tickets, Christmas gifts, trips to Houston, Ashley getting practically no hours at work, a 5% pay cut for me at work, the $4 gas era, and the tanking economy which slashed my February bonus big time, we have saved - that means budget surplus, for you Washington DC types - at least 14% of my take-home pay every single month for a house.  And that doesn't even count the funds we've been building up for medical expenses and random emergency expenses.  Isn't that great?

When I was the financial secretary of my mission, I learned a lot about money management.  One of the first things I had to do was figure out how to slash our telecommunications budget in half, as well as other budget shortfalls.  I did a whole lot of research - luckily, we had 3 years of old bills and receipts I could go through by hand.  With the people at the church offices, we figured out a whole lot of things that were accounted wrong, and other ways the mission could save money.

Later, I got an opportunity from the mission president to accompany him on a mission tour, and teach the missionaries what I had learned.  Because of the missionaries' response to that, we actually ended up with a surplus in our budget, and were able to replace a whole bunch of old pillows, mattresses, and other things that needed fixing in the apartments.  That was all in about 6 months.  Afterwards, in my last area, me and my companion were able to eat like kings on 75% of our food budget, just because we were smart about it.  And we ended up really needing the savings for bike repairs, so it saved our butts.  (Literally.  I broke my my bike seat, among other things, in a crash.  Hehe...)

You wanna know what I taught the missionaries?  Basically, knowledge is power.  And knowing how much you have, and how much you will have to spend, gives you a lot of power.  It gives you the power to save money.  It gives you the power to relax about your financial situation.  It gives you the power to trim your expenses - you have to know what they are first!  It gives you the power to earn interest instead of pay it.  It gives you the power to get out of debt.  It gives you the power to be prepared for emergency of disaster.  It gives you the power to improve your quality of life.  It gives you the power to be charitable.  It gives you power to take control of your life!  It's too bad our country is setting the worst possible example for everyone.  I encourage everyone to figure out a budget and stick to it - maybe even undershoot it.  You will be amazed by the change you'll see.  Less stress, more money, more savings, less expenses, less interest...  It's great.  

We should hold our government to the exact same standard.  How do we do that?  To start, we need to vote out every single member of Congress - Democrats, Republicans, whoever - that voted for the current stimulus bill.  That was just a shameful waste of your money.  If your senator or representative is unlikely to be contested by a member of the opposite party, you need to get them early, in the primaries.  Replace them with someone that promises to balance the budget.  Second, we need a president that has the chutzpah to veto any bill that runs a deficit.  Don't believe that can be done?  Here in Texas, it's illegal to run a deficit.  Unlike California, which is $42 billion in debt, we have $6 billion in savings, just in case.  And amazingly, we have no state income tax, either!  How do we do it?  BUDGETING!  We make a realistic budget, and we stick to it!  But who is out there that can and will do this?  I'll give you some names of governors, former and current, who already did.  Mitt Romney is famous for this, in government, business, and the Olympics.  Sarah Palin is doing it in Alaska.  Bobby Jindal is doing it in Louisiana.  This are the people we need in charge.  And we need to put them there.

...and I'm done.  G'night everybody!


Mandy said...

David, I love reading these posts, dang it! Keep 'em comin'! You should see Ryan yell at the TV everyday over this...

David Merriman said...

Oh, believe me - as long as the nation remains collectively insane, they'll keep coming.

Ashley and I are starting to get into Glenn Beck, which helps. She has to tape it for me, but it's the best thing on. If you don't watch him already, I recommend it.