WASHINGTON — My grandmother Big Mama taught me everything I know about budgeting, and she did it on the back of an envelope.
I’m reminded of Big Mama’s budget brilliance as I hear from readers who work for the federal government or who are contractors affected by the partial shutdown.
Some of these readers have always struggled because they just don’t make enough from their government or contracting jobs. Others live paycheck to paycheck despite earning good money. It’s the latter group who could weather a few missed paychecks if they had done what my grandmother did all her life: budget.
I often use my grandmother as an example of good money management because, with so little, she did so much. She worked as a nursing assistant at a hospital, which means her pay wasn’t great. My grandfather was an alcoholic, so we couldn’t always count on his paycheck making it home. Yet Big Mama, who took me in when I was 4, never was late on a single bill — ever! She raised five grandchildren on her salary and still managed to save. Her home was paid off before she retired.
I know folks who earn six-figure salaries working for the federal government or contractors, and one missed paycheck is sending them into a spiral of despair. Let me be clear. The shutdown is a manufactured, unnecessary hardship forced on the more than 800,000 federal workers who are impacted.
Still, I know many would be in a better financial place if they had just budgeted better.
In 2018, only 41 percent of people surveyed said that they have a budget and keep close track of how much they spend on such things as food, housing and entertainment, according to a survey by the National Foundation for Credit Counseling.
Even if you’re not affected, the government shutdown is a reminder of how important it is to have an emergency fund, which you can’t have if you don’t budget.
For this month’s Color of Money Book Club, I’m recommending a book that will give you a crash course in budgeting basics is “Budgeting 101” by Michele Cagan, a certified public accountant.
“One of the main benefits budgeting brings is busting you out of damaging financial cycles, like living paycheck to paycheck,” Cagan writes.
Here’s the thing about budgeting. It has a bad reputation. When I bring it up, this is what people say:
• “It’s too restricting.”
• “It’s too hard.”
• “It’s depressing.”
Source:: Deseret News – Business News