managing money for dummies

Managing money for dummies is a helpful book that you do not need to purchase. You are not a dummy, you just have not been taught this skill set. This skill needs to be learned just like reading and writing and if no one ever taught you, you would still not know how.

The difference is money management is learned at home, not at school but most parents do not know that they should be instructing their children. So here is your crash course.

The essence of money management is that you need to spend less than what you make. Sounds easy enough doesn’t, it? Yet, statistically Americans do not understand this. According to a CNBC survey, 43 percent of American families spend more than they earn; the average household carries more than $8,000 in consumer debt.

O.k. so how do we apply this information? Find a percentage that you need to live off of, by adding up all of your daily living expenses such as: house note, insurance, taxes, car note, food, utilities, debt etc. Then divide that number by the gross amount (before taxes) of your monthly earnings. I suggest that you have a goal of living off of 60% of your income.

Set aside 10% to give, 10% to save and 10% to have fun with and you have yourself a basic budget plan. Unless you have a business don’t go out and buy budgeting software. You can download a basic budgeting sheet by using Google to find the one that best meets your needs.

However, if you have more questions concerning the specifics of the budgeting plan such as issues concerning debt payoff, bills, college tuition, and emergency funds click here.