by Mario Depeine Sr

Created on: May 26, 2008   Last Updated: June 09, 2008

The first time someone suggested that I get "on a budget" I thought, "ooh, do I need that much help, financially?" It was not a negative thing, but really, they were trying to give me power over my finances. They were trying to help me prioritize and get the most out of my income.

A budget is a financial framework that you set for you and your household. You take into account what you bring in financially and what you intend to spend on a daily, weekly or monthly basis. A good budget takes into account your needs and your wants.

What are my needs? Needs are things that you must have to make life worthwhile. For example, you need a place to stay (with heat or a/c), food to eat, clothes on your back and the ability to get to and from work. Those things include paying the utilities (water, electric and gas/oil) phone (land line or cell). Other items include rent or mortgage payments. Property taxes and house insurance if you do not escrow with your bank. Car insurance and payments are another category.

What are the things in the "wants" category? Those are the things that you can choose to get or not get. Think of buying a car, there are options like the 6-disc cd changer, or the alloy wheels. You can opt to not get those things and still have a car that gets you from point A to point B. The same with your household budget, you have the optional things. Those include things like buying food in a restaurant for lunch, having premium cable channels, getting the latest cell phone (s), having the internet, keeping up with all the latest trends in fashion and the list goes on. You may decide to not get those things and yet you can still live a reasonable life. It may not match up with a lot of other people but you will have the peace of mind of knowing that you will have money when you need it for the things that matter to you the most.

Why have a budget? Consider just daily items that can be purchased like lunch and transportation costs. What will be needed on a weekly basis? Keep in mind food, if you do not set a reasonable amount that you want to spend per week for eating out, you will easily spend a car payment's worth of money just on fast (often not nutritious) food! Consider spending a minimum of $25.00 per day for meals, $125 per week and about $500/month. You could decide to discipline yourself , make your own breakfast, brown bag your lunch and learn how to cook. Just by doing that, you could save $500 per month!

Is it better to purchase with cash or a debit

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