We all hate budgeting, but…

Years ago, I started to help many of my clients refinance their mortgages to taken advantage of better rates.

But I witnessed an eye opening discovery as I watched the work of a number of mortgage professionals.  They would have many clients whom they would refinance almost annually.  These clients would run up the balance on their credit cards to support an inflated lifestyle, and then use the above average increases in the value of their homes as a lifesaver to mask their spending problems.  This worked fine as long as the prices of homes increased, but I always wondered what they planned to do once home prices inevitably reverted to the mean (as any investment will do).

As we all know now, they had no contingency plan and many of them lost their home to foreclosure.

The old fashioned advice of our wise depression age parents and grandparents is as true now as it was then.  The only real way to get ahead is to spend less than you make.  Of course, that is easier said than done. 

I know you don’t want to plan a budget or goals any more than the rest of us, but it is critical now more than ever.  I have tried to develop a simple budget that helps you prioritize your spending.

The first section obviously covers income sources.  Then “Necessary” expenses are listed.  Taxes come first, then housing, food and shelter.  Beyond that is healthcare and other insurance.

Everything else is “Desired” spending that needs to be cut if necessary to avoid eventual disaster.

Please take a look at the budget form and give me your feedback, so that we can make it as helpful as possible.