In the Sunday online edition of The Wall Street Journal, columnist Andrea Coombes quotes Rick in her article, “To Do in ’09: Overcome Your Money Issues.” In the article Andrea emphasizes the importance of understanding your money scripts when trying to change financial behaviors. One of the biggest contributors to our current financial crisis is the inability of most people to live within their means. This means knowing what you make, what your expenses are and, yes, formulating a spending plan or a budget.
Andrea writes, “Another reason people fail to stick to their budgeting plans: They go about it in the wrong way, focusing first on monthly fixed expenses, then lifestyle costs such as clothing and entertainment. “People all the time tell me, ‘I blew my budget on this one-time unexpected expense,’ ” Mr. Kahler says. “What was it? ‘My car broke down.’ ” All cars break down. Car maintenance and repairs fall under the category of occasional annual expenses. You should budget for those before you allot funds for entertainment.
“As a society, we tend to go about it a little backwards,” Mr. Kahler says. “Fixed expenses, lifestyle, and then we’ll see if there’s anything left for the future.”
Rick did this interview from the back of a cab in a snow storm going to the airport in Minneapolis after having given a speech to the Minnesota Financial Planning Association. He said, “We had plenty of time to talk, as it took us 45 minutes to get to the airport! As usual, I gave Andrea enough information to write a book. I thought she did a great job boiling all that information down into an informative and usable article.”
Read the whole article here.
