Sabrina’s Money Matters

Joe made this comment, “How about a post on “how to discipline your sorry ass and follow your budget?” on Update: Sabrina’s Money Matters.

Following Your Budget = Financial Accountability

Accountability – ac·count·a·ble(-kount-bl) adj.

1. Liable to being called to account; answerable.

Earlier I posted How To: Budget with Spreadsheets so that you could have a household budget, I included a spreadsheet that you can copy to your desktop and work with for your Household Corporation (you’ll see why I say this later).

This is where we go from there. You can draw up a budget every payperiod and tweak it and it can say exactly what you’re supposed pay, but you have to pay those bills in order to be successful in following your budget.

Think of it as a spending schedule. Your budget tells you when you can spend money, and how much. It schedules your money so you don’t have to count your pennies, you already know where they land.

Enough philosophy.

Who do you have to answer to? No one. Right?

Typical Single Money Logic: You spend all of your electric bill money on a few (enter your vice here) at the mall, who does it hurt? Only you right?

Wrong. It doesn’t hurt only you. Because if you’ll spend your bill money on things that you won’t have in two years you’re setting yourself up for future financial disaster.

For example, you have electric service with your provider for say four years through apartments you’ve lived in and built what you thought to be a good customer reputation, after all you didn’t switch your company, you stayed loyal right? Well more than 3 or 4 late payments over the course of those years will make you look like you have a poor payment history. You’re thinking, “…well that’s not reported to credit so it’s no big deal”.

Wrong again.

Let’s say you move to a neighborhood that doesn’t have that same electric company available and you have to switch. I recently faced this issue, now if I’d had a poor payment history with my previous provider, the recommendation letter I used to get premier services with this new co-op I must use would have been a problem, because they’re going to let the new company know what kind of customer you are, you may end up with a higher rate, or not be eligible for a discount program. Not to mention you’ll probably have more start up fees and a deposit.

You’ll have the same kind of problem if you do that with the phone company, satellite company, cable company, etc. Utilities are not the place for “Robbing Peter to pay Paul”. You shouldn’t have to do that after this post, because you’ll know where your money is going.

Credit cards are something that’s a no-brainer; we all know that they’ll report you to the credit bureau very quickly when you aren’t paying your credit cards. You think again, it only hurts you right?

Nope. You beginning to see a pattern here?

Here’s the point I’m trying to make, you see commercials with young people buying houses and you think, only if my credit were better, I could do that. Well you can, I’ve given you the tools necessary to obtain your credit report, showed you how to read it, and provided you links and information to dispute anything you need to online.

I’ve even told you how to raise your credit score with a credit card.

With these tools you can have a home in no time at all. I used these tools and within two years I was closing on a brand new home.

Here’s the thing, you gotta live somewhere, so why should that be somewhere that doesn’t contribute to your future wealth? Buy a house, live in it for ten years and sell it, move to a bigger house, better house, a beach, whatever! But don’t live in an apartment when you can afford a house.

You may not want a house for the upkeep and yard work, well, here’s a thought, some communities’ Housing Association dues include yard and home maintenance. Read that again. Quick apartment type service, with homeownership, you read that right.

That’s just one goal, not everyone has that goal, and if you don’t, that’s fine, but wouldn’t it be nice to not have to put up with the rowdy kids upstairs, or climbing three flights of stairs with groceries? Or the people who park in the spot right in front of your apartment?

You have to manage yourself. You are the CFO of your Household Corporation. After this article, you should also be the CEO .