Asian Journal- The Filipino-American Community Newspaper

Budgeting is the systematic allocation of one's limited resources (income) to a potentially unlimited number of needs and wants (expenses). Budgeting your income, though oftentimes tedious and difficult to maintain, can help you better control how your income is being spent.

Some form of budgeting is a necessity if you hope to meet long-term financial goals. One’s ability to control debt is often a good measure of the success of their budgeting methods. For some, a budget is a detailed process of tracking each source and use of their money. For others, it is as simple as setting aside their savings first, then using the remainder for day-to-day living expenses.

For years, studies have been undertaken by all manner of institutions to find out if people feel like they are able to live within their means. Virtually every study has shown that in our society we not only are comfortable living within our means, but that the vast majority of us feel that we would need just 10 percent more income to do so. If we just had that extra 10 percent we would save for our children's college, we would save for retirement, we would prepare for tomorrow. Perhaps the most interesting revelation from these studies is that how much money we make does not impact the results of the surveys. The person earning $10,000 per year feels they need just 10 percent more, the person earning $100,000 feels they need just 10 percent more. The key is not in how much we earn, it is in how we use it.

Our money is like arrows that we can shoot at targets. We pick the targets we shoot at, then decide afterwards whether or not we picked the right targets. Hopefully, over time, we begin to get a good feel for which targets we would like to hit with our arrows. The sooner that we learn that we have a limited number of arrows, the better we learn to select meaningful and lasting targets. Short term targets like expensive clothes, cars and vacations must be balanced against long term targets like college funding for our kids, an emergency fund, and retirement saving.

As our stage in life changes, our targets should change as well. No one can tell you which targets are right for you, but there are several principles that should be followed by every wise individual. Principles like:

• Preparing for a rainy day by establishing and funding an emergency fund.

• Preparing for an emergency by securing appropriate and adequate insurances.

• Paying yourself first by setting aside a portion of your income every month for long term objectives.

Everyone knows what it feels like to spend unwisely. Our feelings of regret are strangely absent when we first make the unwise purchase, or the investment we don’t understand. But we soon know with a certainty that our hard earned resources would have been so much better used elsewhere.

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Evangeline could be reached at her marketing location at the Eagle Rock Plaza, Ground Floor (infront of Jollibee), 2700 Colorado Blvd., Los Angeles, CA 90041, phone number (323) 356-3803 or (323) 254-6787. Her office provides the following products and services: insurance and financial services, income tax preparation, notary public, and resume preparation.

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Evangeline does not provide legal advice. Please consult with your lawyer regarding the divorce process. The purpose of this article is to provide information of general interest to our clients and prospective clients. The information provided is general in nature and should not be considered complete information on any product or concept described.

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( Published November 22, 2008 Los Angeles Asian Journal p. C7 )