Saturday, February 12, 2011

Get That Budget Under Control

I've often heard people talking about the Clinton years as though all we need to do is loosen the belt on spending, haul in more booty - I mean money (it's never a good idea to mention the word "booty" and Clinton in the same sentence), and - ala-kazam!  We're havin' GOOD times, baby!

Yeah.  That'll happen.

Instead, read this post about an analysis of what REALLY did happen during the Clinton years.  It turns out that tightening your belt really does work.

Who ever could have thought that would work?  Except me, and everyone who has tried it in their personal budget.  Believe me, I know.  I've had raises that evaporated in the sun, because I made no changes to my spending - in fact, since I now had extra money, I spent more - a lot more.

My DH and I are living in tightened circumstances right now.  His work this year has been sporadic, and we've made some changes.  It's called living within your means - I HIGHLY recommend it to governments everywhere.

UPDATE:  I found this piece on the Wall Street Journal by Arthur B. Laffer - the man who popularized the term "Laffer Curve" on the effect of lowering taxes.

It turns out that now only does the government collect more money, but it leads to economic upturns.

Who knew?

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2 comments:

Sofia Britts said...

Tightening your belt could be effective for some people, but for those who are more into luxurious stuff, then it's doubtful. Part of budgeting is taking notes of things that should be prioritized. It's a need vs want battle. As taxes are continually increasing, more people are still relying on payday loans to make ends meet. Planning ahead of time is also a wise way of controlling your expenses.

John Lair said...

As they always say, budget is not a four-letter word! Oftentimes, we cut our budget for our needs to make way for our wants and will just aid it with our receivable financing. But what if our receivable will not land in our hand on time? Then, our financing will lose one leg. It's like doing self-service in a restaurant. Loansare always in the scene when it comes to budgeting. But we do not need to overdo it; we should only have those that are manageable. In a way we won't need to tighten our finances in the future.