Posts
DAYTON- Lately, I have heard a lot about how the government is having trouble coming up with a budget that everyone can agree on. Even though the characters are different, the disagreements are very familiar to me, as I work with families having budget problems all the time at the Center for Family Responsibility, and through volunteer work at my church. All of my experience advising people on budget issues has made me aware of some of the common roadblocks to making a good budget that satisfies everyone’s needs. Whether dad wants a new lawnmower, mom wants a new ironing board, or Sally wants a new sundress, making a budget requires sacrifice by everyone. Today, I want to pass along some of the lessons that I have learned that can help make the budget as painless as possible.
1. Distinguish between Needs and Wants: The Government can save an awful lot of money by figuring out what it really needs, and what it just wants. I would tell the Democrats and Republicans to make a list of everything they will need to buy in the next year, then divide it up into two columns- one for Wants and one for Needs. Some expenses are necessities; the Government is going to have to budget for roads and schools no matter what. But, for example, the Republicans should
ask themselves if they really need the Bush tax cuts. Could rich people live without a huge tax cut? That’s the kind of tough question the Government needs to be asking itself as it comes up with a budget.[RIGHT- With irresponsible financial decisions like this one, it's no wonder the Government is having budget problems.]
2. Try before you Buy: Tell me if you have had this experience before: you see something in an advertisement on television and decide that you have to have it. You shell out your hard earned cash to buy it. It finally shows up on your doorstep, and after putting it together, it does little more than gather dust. Eventually, it gets relegated to a storage closet without ever living up to the money you paid for it. The Government faces this same problem. Take the F-22 Raptor twin-engine fighter jet, for example. For years, the Government wanted the F-22 Raptor worse than Ralphie Parker wanted a Red Ryder BB gun. It sunk billions of dollars into development of the air-to-air combat fighter, only to learn that it didn’t have a use for that technology after the end of the Cold War. If I was advising the Government at that point, I would have told them to try renting an F-22 Raptor, or maybe buying just one to see how it worked, rather than blowing a fortune on an entire fleet of planes that never get taken out of the hangar. The Government can save money in its budget by getting rid of things it doesn’t really need, and trying before you buy is a great way to test how necessary a purchase really is.
3. Little things add up: With a budget as big as the Government’s shaving even a few percentage points off the top can result in big savings. The Government should look into reducing interest payments on its debt by trying to get a home equity loan or line of credit to consolidate all of its debts in one place. I know the Government has had bad experiences with home equity loans in the past, but maybe it should shop around with some of the big lenders- like China, India, and Brazil- to see if any of them want to buy up all of the nation’s debt so the Government could make one, low monthly payment. Many people make similar mistakes with their banks. If you just assume that your banks fees are part of life, you might be missing out on better deals elsewhere. The Government should try to find a bank that offers totally free checking and offers the best possible interest rate. Even if the bank is just charging $20 per month in fees, that’s $240 every year, and it doesn’t take a mathematician to see that those numbers start to add up.
Even though the Democrats and the Republicans in the Government have had a hard time agreeing to a budget, I believe that by following these simple steps, they will be able to an agreement that pleases everyone. With a little bit of hard work and some “trimming the fat,” the Government should be able to avoid a messy conflict and finger-pointing that doesn’t help anyone.
2. Try before you Buy: Tell me if you have had this experience before: you see something in an advertisement on television and decide that you have to have it. You shell out your hard earned cash to buy it. It finally shows up on your doorstep, and after putting it together, it does little more than gather dust. Eventually, it gets relegated to a storage closet without ever living up to the money you paid for it. The Government faces this same problem. Take the F-22 Raptor twin-engine fighter jet, for example. For years, the Government wanted the F-22 Raptor worse than Ralphie Parker wanted a Red Ryder BB gun. It sunk billions of dollars into development of the air-to-air combat fighter, only to learn that it didn’t have a use for that technology after the end of the Cold War. If I was advising the Government at that point, I would have told them to try renting an F-22 Raptor, or maybe buying just one to see how it worked, rather than blowing a fortune on an entire fleet of planes that never get taken out of the hangar. The Government can save money in its budget by getting rid of things it doesn’t really need, and trying before you buy is a great way to test how necessary a purchase really is.
3. Little things add up: With a budget as big as the Government’s shaving even a few percentage points off the top can result in big savings. The Government should look into reducing interest payments on its debt by trying to get a home equity loan or line of credit to consolidate all of its debts in one place. I know the Government has had bad experiences with home equity loans in the past, but maybe it should shop around with some of the big lenders- like China, India, and Brazil- to see if any of them want to buy up all of the nation’s debt so the Government could make one, low monthly payment. Many people make similar mistakes with their banks. If you just assume that your banks fees are part of life, you might be missing out on better deals elsewhere. The Government should try to find a bank that offers totally free checking and offers the best possible interest rate. Even if the bank is just charging $20 per month in fees, that’s $240 every year, and it doesn’t take a mathematician to see that those numbers start to add up.
Even though the Democrats and the Republicans in the Government have had a hard time agreeing to a budget, I believe that by following these simple steps, they will be able to an agreement that pleases everyone. With a little bit of hard work and some “trimming the fat,” the Government should be able to avoid a messy conflict and finger-pointing that doesn’t help anyone.
This comment has been removed by the author.
ReplyDelete