Chapter 3: How can Money Help or Hinder? 4. The Budget: A Plan for Spending

Most families will have to get into the habit of holding their purchases up to careful scrutiny, asking such questions as: Do we need this? Does it fit into our scheme of living? Or will the purchase of this throw our spending out of balance and make it impossible for one or both to have things which we need even more?

Such questions will call for a plan of spending, a budget to show where money goes and how far it will reach. Such a plan is a help in buying wisely and keeping out of debt. Some insurance companies and banks have budget books and pamphlets showing how a family should use its income and how its members may make economies without sacrificing welfare. These are well worth having for their help in planning the family expenditures, but any ready-made scheme must be adapted to the particular case.

In a general plan distinguish between needs and mere wants, and take care of needs first. Make allowance for the type of income; whether a fixed amount, or the fluctuating returns of many lines of business and some professions. Where the amount per month varies, budgeting will be more difficult, but expenditures should be on a scale allowing for possible shrinkage. There should also be some provision for expenses that no one can foresee.

When both are earning it is well to set the standard of living as close to the husband's income as possible, because the wife's earnings may be interrupted by the coming of children, at which times there will also be extra expenses. It is better if possible to put the wife's earnings into a fund for children and their education, or for the purchase of a home, or for saving. If the family starts out on a budget absorbing the entire earnings of both, they may have to lower their standard at a time when it will be difficult. Remember that the total income is to be used over a period of years for the greatest good of the family, including parents and children.
Debt is an added load, easy to acquire and hard to pay. Beware of borrowing, and do not assume obligations that are likely to strain the family, because they are likely also to result in loss.

The couple starting out may well think of their needs under the following headings: Housing; Furniture and Equipment; Food; Clothing; Running Expenses; Health; Improvement; Savings.

Housing. Housing should be determined by comfort and general adaptability to the family's needs. The rent should not be more than one-fourth of the total budget, although in many cities rents are such that the proportion for this item may have to be increased.

If a house is purchased or built, it should not ordinarily cost more than the family's income for two years, for it is not wise for any family to load itself with a burden of debt which may enslave them to interest and other payments. Whether the house is owned or rented, care should be used in keeping it in as good condition as possible.

The outward things of the home should minister to the inner values. Restful furniture with good light and a well chosen color scheme provides a good start. Add loving looks and zestful cooperation to combine outward and inward things in harmony.
A simple rule for getting twice as much value for the money we pay is to have twice as good a time in the home. We get our home values not from the way things look outwardly but from the way we feel inwardly. A man does not want to have things painfully in place, nor would a child want to live in a house so unruffled that he could never play at home nor have a pillow fight with his parents. The house exists for the family, and not the family for the house; therefore, it should be a help and not a burden. It should be a place of fellowship and joy.

There are great satisfactions in owning a home, but also real risks. The city family on a small income should consider whether the work situation is dependable or whether there is a likelihood of transfer to some other place. It is to be hoped, however, that greater economic security for all families may become possible so that those families which desire homes of their own may have them. Young homemakers should be on the watch for opportunities to aid sound movements for better housing.
Furniture and Equipment. In the past some young couples have overloaded themselves by purchasing a houseful of furniture on credit. Then in times of stress they have had to give up the furniture and have lost all that they had paid on it. It is better to begin simply, if necessary, and to buy a few articles at a time. Moreover, every young couple by looking around can find a few pieces at little expense. Sometimes good furniture has been stored away, so that occasionally a real find may be brought out and refinished for the new home. This is fun for the homemakers and gives the satisfaction of saving. At the same time it rescues some fine pieces from oblivion and puts them to good use.

When the family sets out to buy furniture or equipment the members should be guided by their own needs rather than by sales pressure. They should also buy from reliable concerns, because there are many things which look good but really are not. Where there are cooperative stores the family should find out about the benefits of membership.

One's home is primarily a place to live in and not for show. There is little comfort in having costly things if there are worries attached to them. On the other hand, those who have money to spend may well use some of it in beautifying their homes. The reading of one or two good books on interior decoration may make an almost unbelievable difference in the attractiveness of a home and, at the same time, involve little or no extra expense.

Food. Almost any family, with care in buying and preparation of food, may be well nourished on a fraction of what thoughtless spenders might use. Both as a homemaker and a hostess the woman who can prepare tasty dishes is prized. Though many young women in these days marry without much experience, the bride should not remain inefficient in these matters. She should study the art of preparing simple and favorite dishes unusually well and serving them in an atmosphere of good cheer, for such meals prepared at home provide a better foundation of health as well as a substantial saving. To assure the latter, however, the family must avoid waste. The housewife who wishes to buy most wisely should get the government reports based on scientific studies on diet and health which offer suggestions for families of various sizes and on different levels, such as "a liberal diet," "an adequate diet at moderate cost" and "an adequate diet at minimum cost."

The family of limited means should keep away from expensive places and avoid extravagant entertaining. They should know that fruits, vegetables and fish are cheaper and also better when they are in season, and that it is well worth while to find out which meats are the best buys at any particular time. The housewife who is a skilful buyer can make the food dollars go much farther.

Clothing. Care in buying clothing and keeping it in condition will enable the family to look well on a moderate expenditure, while with carelessness they are not likely to look well on any amount. "A stitch in time saves nine," and the nine are not only laborious but costly. The habit of folding, brushing and hanging up clothing and of keeping shoes in good condition will result in saving, because the wearing apparel will look well as long as it lasts and will not need to be replaced so quickly. True style is a matter of dressing carefully in a way that fits one's individuality rather than being too much dominated by mere caprice of fashion. A good appearance is a matter of knowledge and study issuing in good taste.

Running Expenses. Running expenses include such things as heat, light, gas and service. A well managed household is one in which electricity, gas and water are not wasted, and the heating plant is regulated properly. Little savings in these matters are worthy of attention, for running expenses will run away with the budget if not watched. When necessary, outside service can be dispensed with almost entirely, for it is better to do one's own work than to run into debt to pay the cleaning woman or the handy man.

Health. The best medicines are air, water and sunshine, and the best safeguard of health is exercise. For many this comes naturally with work. Others, whose daily program is a sedentary one, should plan carefully for good times together which will also give exercise. Games, hikes, swimming, tennis and such things are more fun than high priced recreation, and at the same time they are wonderful for the health.

In addition to the health benefits provided by nature every family will need the care of the family doctor and of the dentist on occasion. When you need a physician get a reliable one. Prevention is better than cure. Regular visits to the dentist give better results and cost less than neglect of the teeth. Also the family should investigate the group plans for hospital service on the basis of small regular payments, such as the Blue Cross Plan.

There are a number of "don'ts" in the health world. Don't get the habit of depending on the drug store for health. Most of the money spent on patent medicines is wasted if not actually detrimental. Don't waste money on quacks, and don't depend upon mere tricks for keeping up mental and spiritual health. Let health grow out of wholesome adjustments to life.

Don't jeopardize health and happiness by alcoholic drinks. A recent report has indicated that with the increase of drinking there has been a striking increase of uninsurability of men under thirty due to alcoholic causation. A person. who for this cause is not even insurable is not so likely to be a success as a marriage partner. Alcohol has ruined countless homes. Shakespeare commented on the fact that men will put an enemy into their mouths to steal away their brains. Strange it is that people will take into their homes an enemy that steals away the happiness of so many. People who feel that they simply must follow any custom which others set will need to get down to more basic thinking if they are to make the best kind of a home.

Improvement. Improvement as an item in the budget means that the family needs to spend money for books, magazines, music, entertainment, and vacations, as well as for education of children. Under this heading also come the support of the church and such philanthropic enterprises as particularly appeal to a studied interest. Whether the income is large or small it is desirable to study how it can be used to gain the greatest amount of real benefit, and to consider how the use of money can be harmonized with the greater satisfactions that wealth cannot buy.

A certain broadening of interests results from giving even a little. Contact with great causes opens up new areas of the finest fellowship, educates the family in sympathy and increases its grasp of world affairs.

Saving. With employment and efficiency, the husband and wife ought to have a plan for saying. It has been found that families which do not live up to the full extent of their income but save some small part at least, make a greater success of their family life. It is well, if possible, to have an account at the bank held jointly. The family ought also to have the protection of insurance with some carefully chosen company, with policies representing about twice the annual income for the protection of the wife, and when children come about twice the annual income for each child. Premiums should be paid for on an annual, or quarterly basis, since policies for which weekly payments are made are much more expensive in proportion. Saving and insurance add to family stability. Small savings added together can become substantial. When these are to be invested beware of get-rich-quick schemes and get the advice of your banker.

A plan for saving will be possible for the ordinary couple only when they guard against loading the financial canoe with a mass of things bought on "easy payments." Sometimes, without reckoning carefully the sum of them, young people assume more obligations than they can carry. To live within one's income is a satisfaction: to live beyond it endangers not only credit but also the rock foundation of personal freedom. Moreover, saving and paying cash for things which we really need makes possible a considerable increase in the number of real needs that we can satisfy. Installment buying is usually very expensive business, and buying things that have no real value for us is sheer folly.