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Marketplace Features
For cassette copies of our special series, "The Gelt Trip,"
or
any Marketplace program, please call: 303-823-8000.
Stories in the series:
Kids and Money
Reality Checking
Not Your Mother's Budget
Financial Planning
High-Tech Money Management
Not Your Mother's Budget
Amy Eddings
Host: Budgeting is not one of life's little pleasures. For most people, managing income and expenses on a regular basis ranks right up there with blind dates and root canals. But the process is a vital, and standard, part of any business...and financial planners say most of us would benefit enormously if we budgeted, too. As part of our series on personal finance, we asked Amy Eddings to find out who's budgeting, who isn't...and if it really matters.
Steer the conversation toward the subject of budgeting -at this barbeque in Clinton, New Jersey, about an hour and a half west of New York City, or ANYWHERE, for that matter --and you may get a response that's a lot like this.
Mike: "Oh, budgeting?! (Laughs.) We're, like, the 'before' picture....'Incapable of.'" (Laughter.)
The self-conscious laughter and bemusement say a lot about how we think about budgeting. The numbers say even more. Americans saved only 2% of their disposable income last year. The number is likely to be even lower THIS year; personal saving in June was point-two percent, the lowest it's been since the Federal Reserve Board started tracking the figure monthly in 1959. We'd rather buy it now than budget for it, and the average person carries 15-hundred dollars in credit card debt.
And then there are people like Claire Tondreau.
Tondreau: Budgeting, it's -yes, line by line, every receipt, you know, for a dollar-ten cent purchase, yeah. Amy: Why'd you start doing that? I mean, it's so tedious, it's so boring, it's so difficult...
Birkner: I'll answer that. Claire LIKES doing this. She LIKES budgeting.
That's Tom Birkner, Claire's husband, who admits to never balancing his checkbook in his life.
Birkner: I mean, it's amazing, isn't it. I find it thoroughly depressing. She finds it cathartic, in some certain way.
[Amy, to Claire]: Do you?
Tondreau: No, there was a reason I budgeted. I kept this incredible line-by-line budget because I really wanted to buy a house. That was the one thing I wanted, and from the time I was 23, I realized I was going to squander everything I had and never meet this goal unless I kept incredible track of where all the money went.
Financial goals --the kind that come with maturity, like a house, a kid's college education, or retirement --are the biggest reasons why people start budgeting. Until then, many just wing it. That's what Nisim Parliyan and his wife, Alexa, did until about seven years ago.
Nisim Parliyan: I wish we'd started earlier. I wish we'd started right after we got married. But, for like, three years, we were kinda like, you know, just trying to make money and trying to survive without, really, goals and how to really achieve the goals.
Like any budgeters, the Parliyans first had to find out where their money was going. Then, they had to decide if they LIKED where it was going, and re-channel it if they didn't. Easier said than done, especially when so many budget busters lurk in the shadows...the seductive, fast cash lure of the ATM...the false comfort of bounce-free checking...and the illusory wealth of the credit card, which Alexa Parliyan knows first-hand.
Alexa Parliyan: When I was in college...I always spent way more than I had. Because I put it on credit cards. So when we got together, I had, like, a three or four thousand dollar debt. And for me, at that time, because I was making $100 a week, that was a lot of debt.
She budgeted, and paid the debt off.
Financial advisors say the interest in budgeting is rising, fueled in part by a hot market, greater financial sophistication, a decline in the availability of pension funds, and doubts about the future of Social Security. Book chain powerhouse Barnes and Noble says budgeting books have been enormously popular for the past three years, and the financial planning industry is taking off. The National Association of Personal Financial Advisors says it received 36-thousand requests last year for help, up from only 14-thousand two years ago. Karen Altfest is a certified financial planner in New York City who also directs money management courses at The New School in Manhattan.
Altfest: People are coming in earlier and earlier. We used to see a lot of people who were close to retirement, who were 59-plus. And we thought a young person was 42 or 43. Now the young people are 26 and 28. I think it's a wonderful trend.
That doesn't mean that everyone who's worried about their financial future will budget, or need to; Altfest says plenty of people look the other way. And some folks are just naturally thrifty...just like some people don't have to diet to stay slim. But Altfest says a budget can do wonders for your mental health. It makes Claire Tondreau feel smart, and safe.... though her husband sees it differently, of course.
Claire Tondreau: It makes me feel knowledgeable! It's not a control thing! It's, you know... (laughter).
Tom Birkner: Ughhh. (Laughter.)
Go ahead, groan about budgeting. Then do it...and do what Claire did. Plunk down a nice down payment on your dream home in Pennsylvania.
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| Our series was reported by: Scott Horsley, Kristian Foden-Vencil, Amy Eddings, Jessica Smith and Michelle Brier; edited by Eve Epstein and Michelle Brier; engineered by Neil Rauch; with production assistance from Sara Ivry, Ben Donovan and Julie Hantman. |
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