Of Balancing and Budgets

Posted: February 22, 2013 in Weekly Blog Posts

Last night (Wednesday),  I attended Pizza and Politics in the Events Area of Cunningham Memorial Library on the campus of Indiana State University. The session had an eye on Indiana’s state budget and how it directly relates to public institutions of higher learning such as ISU. The Executive Director of Government Relations at ISU, Greg Goode began the presentation by giving a summary of his role in Indianapolis fighting on behalf of ISU for more state funding. Beside him was Bob Heaton, District 46 Representative in the Indiana House.

I’ll give you the main reason I went to this event: free pizza after a bout in the hot tub at the rec center. However, I found the money talk more interesting than I thought I would. Did you know higher education accounts for 12% of the Indiana budget? Did you know Indiana State has an operating budget of 144 million; 45% of which comes from tuition? I expected the percentage from tuition to be higher. After listening to President Bradley and the powers in Indianapolis, it got me thinking about my own finances and budgeting.

Here is what I think: the American government and more specifically the American public has gotten into the financial disaster we’re in simply by not living within our means. Credit cards have satisfied the “must have it now” attitudes and folks are willing to pay upwards of 20% interest in some cases on late credit card bills. I understand financing homes and vehicles, but why would you make monthly payments on furniture, stereo systems, appliances, pets, etc? Aren’t these things one would want to pay in full? Isn’t this common sense? I just finished Dave Ramsey’s Financial Peace, and learned interesting tips concerning personal finances. Indeed, Dave does NOT advise making payments on couches, TV’s, or book shelves. I don’t figure I ever will. The “envelope budget” is going to be my bread and butter.

In a nutshell: I will deposit my bi-weekly or monthly paychecks and take out an amount of cash for certain categories agreed upon by me and my soon-to-be wife, Erica. These categories include: groceries, entertainment, vehicle maintenance, and eating out among others. Each category will have an envelope and when it is gone it is gone. It will take self-discipline and control. Doing this will allow the rest of our paychecks to go towards Roth IRAs, emergency funds, and mutual funds. Our goal is to comfortably retire millionaires while still being charitable to church and the community. Lofty goals? Perhaps, but I think we can do it.

I am probably naive, but I think at its most basic level, finances are common sense. Spend more than you make and you will be in trouble; bank more than you spend, your savings will grow. Isn’t that pretty accurate? My wife and I will always live within our means, will have few credit cards, will only have debt on a house/apartment and car, and will be charitable to our church and other causes. I believe in balancing your checkbook every month, knowing where your paychecks are going, and having an agreed upon monthly budget, all while having an emergency fund in reserve for inevitable roadblocks. Clearly, my mind was elsewhere by the end of President Bradley’s talk.

Maybe I’m off my rocker, but I doubt it.

Thanks for reading and have a nice day,

Levi.

 

Budget; Mr. T in DC

Mr. T in DC via Comfight

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Comments
  1. Mom says:

    You are already so far ahead of your peers. Your parents’ generation took credit card debt to a whole new dimension. (Not your parents tho luckily. You must get your smarts from them!)

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