Budget busters – areas that can result in financial disaster.

(The following percentages are for a 4-member family with an annual gross income of $130,000 or less. Net Spendable Income (NSI) is money available after tithe and taxes.)

Housing (38 percent of NSI)

• Don't buy or rent a house you can’t afford – total housing includes mortgage, taxes, insurance, utilities, phone, and maintenance.
• Don’t finance closing costs or secure a second mortgage for a down payment.

Food (12 percent of NSI)

• Plan and stick to written weekly menus.
• Don’t shop when hungry or hurried. Do shop specials, store labels, and use coupons.

Automobile (15 percent of NSI)

• Buy quality used cars you can afford, and don’t trade in before car’s usefulness is over.
• Auto price, maintenance, gas, tags, taxes, and insurance are all part of cost.
• Consider dropping collision insurance on cars more than four years old.

Debt (not housing or auto – 5 percent of NSI)

• Establish a payment schedule to pay all creditors regularly, and get rid of credit cards that you can’t pay in full each month.
• Sacrifice wants and desires – buy with cash until debts are current.

Insurance (5 percent of NSI – if your employer provides medical insurance)

• Find a well-informed, trusted insurance agent to get the best possible provision for the money.
• If you have no medical coverage through employment, consider major medical insurance – it can covers up to 80 percent of medical expenses due to catastrophic illness or injury.

Recreation/Entertainment (5 percent of NSI)

• Recreation-oriented Americans, who are in debt, shouldn’t borrow to entertain themselves.
• Plan vacations during off seasons, select local vacation destinations, consider camping.

Clothing (5 percent of NSI)

• Save money and buy without using credit.
• Purchase off season if possible, and select home washable fabrics and outfits that can be used in multiple combinations.

Medical and Dental (5 percent of NSI)

• Prevention is cheaper than treatment.
• Teach children to eat the right foods and clean their teeth properly. Good diet, rest, and exercise will most likely result in better health.
• Ask doctors and dentists in advance about costs, shop for prescriptions, and ask for generic drugs.

Savings (5 percent of NSI)

• Without savings, the use of credit and debt becomes a way of life.
• Use payroll deduction for savings. If it’s not available, your bank can automatically withdraw from checking account to savings.

Remember budgets don’t operate on auto-pilot, they require effort and family understanding. If you’re determined to achieve and maintain a debt-free lifestyle, then living on a budget is essential. Don’t bust your budget.