Thursday, April 14, 2011

family budget the California way!

Since 90% of folks in the US live on a median income of $31,000, we all try to economize and live on a budget, but especially in these difficult economic times, it's critical. Perhaps, then, you'd like to follow these handy tips to family budgeting, based on the best practices in California.

1. Reduce household income

If two people in the household both work full-time, your wages may be so high as to create certain pressures to spend them. A simple solution we've used for years in California is to reduce revenues. One of the two of you should go part-time, or, better yet, quit, and don't look for work. If there is only one wage-earner in your household, an alternative would be to ask for a reduction in salary. Many bosses are happy to accommodate such requests.

2. Have lots of loud arguments in public about your finances

A lot of families already do this, and it's good that they do, because, like in the California legislature, those shouting matches demonstrate your commitment to principle. Nah, I'm kidding. They're really just spectacles of public humiliation used as part of a strategy to undermine your opponents. But the appalling display of illegitimacy and unfitness for decision-making create terrible uncertainty and anxiety, and that's sure to make people frightened about what decisions you will, eventually, make. In other words, it can be useful to make your kids shut up.

3. Max out your credit cards

Buying on credit is a great state tradition. In fact, California routinely takes out emergency loans when our annual budget squabble threatens to shut down the entire state government and a large portion of the state's economy in general. Using every bit of your line of credit is a great way to show your credit card company that you're serious about consuming, and need and want even more debt.

4. Base your budget on as much financial information as you can find

Budgetary decisions that are pragmatic and realistic depend on the quality of the information used in making them. California bases its state agencies' budgets on assumptions about what state revenues will be, and what the agencies need to perform their services. Then we tear that up and write random numbers down on sticky notes, then sticking them on an organizational chart of state agencies.

You could do the same! Here are some numbers you can use: $13, $490, $3.98, $12,872, $i. Now, here are some budget categories you can use: turkey feed, boxes of rocks, cable tv, alimony, booze.

To demonstrate how this works, I've just gone through the California budgeting process using the above information - the best available to us as of this writing. For next year, my plan is as follows:

Expense category Amount
turkey feed$12,872
boxes of rocks$3.98
cable tv$i
alimony $13

Now that my spending plan is in place, all I have to do is go have a screaming match with my mate, use my Visa to buy $6000 worth of plastic forks, and quit my job, and I'll be ready for the next fiscal year.

No comments: