money matters by sylvester clemente
MakING ThE
Right Decision
“Unless you were born
into great wealth, or have
amassed your own fortune,
you will need to fashion
some form of a budget.”
How are you at making decisions? Do your friends ask you for your
because you are an adult.
opinion when they have to make an important decision?
Unless you were born into great wealth, or have amassed your own fortune, you
will need to fashion some form of a budget. Don’t believe that financial security
If a friend asked you to help them make an important decision regarding her
just happens. It is, conversely, the result of planning and discipline. I’m going to
ability to afford to buy something, could you help her? Let’s say that she wanted
make an easy one for you to use as a model for yourself.
to buy a new car, what questions would you ask her? Go ahead, think of a few, I bet
I take home $3,000 a month. My paycheck has medical insurance, my retire-
some come to mind immediately.
ment plan contributions, and an appropriate amount of taxes are taken out.
What would you do if a friend asked your opinion regarding whether he could
I spend $900 a month on rent. My utilities (cable, XFM and cell phone too) are
afford to go to New York City for a shopping weekend? Would you just say, “go,
$200. My auto and renters insurance is $200. My groceries, household necessi-
it will be fabulous!” or would you ask him a few personal questions first? Would
ties and out-of-pocket medical expenses are $300. My car payment, gas, regular
your recommendation be influenced if you knew that he was going to put the
maintenance and Mr. T air-fresheners are $500. My clothes (including shoes) for
whole trip on his credit card, and that his company was going through layoffs
work, casual and the gym are $250. My gym and other clubs cost $75. My meals
next month? Of course you would, because it’s what a caring friend does.
out are $325. My entertainment, travel, family, gifts, software, porn, furnishings,
So why do we not do the same for ourselves? Do we care less about ourselves
pet care, coffee and bar tab are $500.
than our friends? No, surely not.
Uh oh, I spend $250 more than I bring home. Now it is time to put my decision-
Some of you are thinking, “I consider if I can afford to go on vacation, or buy a
making prowess to work. I will do my best to remove my ego out of my decisions,
new car, this column does not apply to me.” I am sure that many of you do make
and take out those things I really don’t need. If I find that impossible, I’ll look for
good decisions making big purchases. What I am equally sure of is that few of you
a part-time job…if any exist. If I cannot do either, it means that I need help, and
create, and stick to a budget. Yes, the dreaded “B” word. But think about it, isn’t a
that’s okay. I’ll ask a friend who cares about me for their opinion.
budget just a series of “can I afford it” questions?
Go ahead, use my example to create your own. There are only 10 categories
The resistance to budget is probably more psychological than because it is a
that you have to calculate, and then you’re done. Pretty easy, right? For those
difficult exercise. Who wants to be reminded of their financial limitations all of
of you who want to create a more comprehensive budget, there are dozens of
the time? Why bother creating a plan that will let you have less fun than you do
templates online for free. Like everything else, the first step is the most difficult.
today? Especially knowing that you won’t stick to it anyway? The simple reason is
Fortunately it’s also the most rewarding. Good Luck!
86 RAGE monthly | APRIL 2009
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