PHOTO: MARTY BALDWIN
C e n t s
a n d
s e n s i b i l i t y
G e t y o u r f i n a n c i a l h o u s e i n o r d e r w i t h a n e q u a t i o n
t h a t ’ s
e q u a l p a r t s n e w h a b i t s
a n d n e w a t t i t u d e s .
BY SARA
C L E M E N C E
u r recen t read er su rv e y
re su lts co u ld n o t h ave b een
m ore clear: Y o u w a n t to g e t
co n tro l o f y o u r fin a n ces, and
y o u r b ig g e st co n ce rn s are
b u d g e tin g , savin g, and p a y in g d o w n d eb t. So
w e asked to p m o n ey p ros fo r th e b e st w a y s to
d o ju s t th a t. W h ile c o s t-c u ttin g is a facto r, th e y
say th a t h a v in g a cle a r v isio n and a p lan w ill
u ltim a te ly d eliver th e m o st p o w e rfu l resu lts.
D aunting? M ayb e. D oable? D efin itely — e sp e -
c ia lly i f y o u g iv e y o u rs e lf so m e tim e to g e t up
to sp eed . H ere’s h o w to g e t sta rted .
BRING BALANCE TO BUDGETING
B u d g e tin g can feel lik e th e g ro w n -u p e q u iv a -
len t o f h o m e w o rk — tim e -c o n s u m in g and
fa r fro m fu n . B u t w ith o u t a b u d g e t, p eo p le
ca n en d u p stre tc h e d to th e ir fin a n cia l and
e m o tio n a l lim its. “J u st lik e w e t r y to d o to o
m uch w ith th e little tim e w e h ave, w e tr y to
d o to o m uch w ith th e m o n e y w e h ave,” says
L iz W e sto n , fin a n cia l co lu m n ist an d a u th o r o f
th e n ew b o o k
T h e 10 C o m m a n d m en ts o f M oney.
T h e rig h t b u d g e t— le t’s ca ll it a sp e n d in g
p lan — ca n e lim in a te th a t p ro b lem . W e sto n
a d v o ca te s th e 50 -30 -20 p lan , d eve lo p e d b y
E liza b e th W a rre n , a H a rv a rd law p ro fe sso r
an d c o n su m e r p ro te ctio n ch am p io n . T h e plan
is e a s y to u n d e rsta n d , sim p le to apply, and
leaves p le n ty o f ro o m fo r en jo y m e n t. “ O n ce
y o u g e t th is b u d g e t se t up, y o u r life is g o in g to
ru n a little m o re sm o o th ly ,” W arren p ro m ises.
W ith th e 50 -30 -20 p lan , y o u d ivid e a fte r -
ta x in co m e in to th re e ch u n k s. H a lf g o e s to
n e e d s— e x p e n se s th a t c a n ’t b e p u t o ff w ith o u t
co n se q u e n ce s, su ch as th e ren t o r m o rtg a g e ,
u tility b ill, h ealth in su ra n ce , m in im u m loan
p a y m e n ts. A fu ll 30 p e rce n t g o e s to w ard
w an ts: d in n e rs o u t, trip s , a n e w h an d b ag. T h e
fin al 20 p e rce n t g o e s to sa v in g s o r d eb t rep ay-
m en t. I f n eed s add up to m o re th a n h a lf o f
y o u r in co m e, y o u h ave tw o ch o ices: F ig u re o u t
w a y s to lo w e r th o s e c o sts b y a d ju stin g y o u r
p h o n e plan o r e v e n d o w n s iz in g y o u r h o m e, o r
red u ce th e a m o u n t y o u sp en d o n w a n ts — n o t
