Not Enough Money?

Do both you and your spouse work but feel as if you're still barely scraping by? With inflation, rising fuel costs, a fluctuating housing market, and higher food prices, many couples face the problem of two incomes that feel like one.

The key to making ends meet in this economy lies in reorganizing your budget.

I know, it's the dreaded "b" word. But nowadays, if you're not working under a budget, you're headed for trouble. And if you are under a budget, it may be time for a budget overhaul—since what worked last year may not work this year.

Need help? Try using the 10/10/80 Budget™. It's simple to use and adjustable for your unique financial needs. Here's how it works.

Ten percent: Give generously. If you want to regain control of your budget, then commit the first 10 percent (which is a "tithe") to your church. Yes, it seems counter-intuitive. But by giving away the first portion of your income, you're following God's mandate: "'Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,' says the Lord Almighty, 'and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it'" (Malachi 3:10).

Ten percent: Save diligently. Allocate 10 percent from your paycheck before you even see it—direct deposit it to your savings account and/or your 401(k). If you never see this money, you'll more easily adjust your spending to live within your means.

Eighty percent: Spend wisely. It's difficult to say which of these three categories is the most challenging. For some, it may be giving away that first 10 percent—they're just not used to that kind of generosity. For others it may be saving the next 10 percent, as they always seem to dip into that account to pay a bill. But in my experience, this final part of the budget, the big spend, can solve the other category problems if you spend smarter and live within your means.

Getting started

Step #1: Calculate your income. Determine your household income after state and federal income taxes and social security. Income includes salary, rents, notes, interest, dividends, and tips. Enter the total on the "net income" line on the budget form.

Step #2: Calculate your current spending. Figure out where you are currently in your spending. You may discover a few surprises, such as how much debt you take on each month through credit cards. Fill in your spending levels on the chart and be prepared for a reality check!

If you prefer online tools, go to msnmoney.com, motleyfool.com, or crown.org to help meet your techie needs.

Step #3: Calculate your current situation. Take your net income (the money you get after taxes) and subtract your spending to see your overall situation as a couple. Are you spending more (through credit) than you make each month? Are you spending everything you make (with nothing going into savings)? Are there unexplained gaps in your current spending levels?

Step #4: Set your budget! Fill out your proposed budget to match your current income and allow you to pay your bills. The most important aspect is to tailor it to meet your needs. For example, you might drive a company car, so your automobile expenses would be slightly lower than average. You could put the money saved from that expense toward paying down a credit card. Or since you already know your previous budget isn't working, you may need to cut your food bill or shop around on insurance.

Once you've given your finances a complete reorganization, you'll find that your bills are getting paid, your savings is getting funded, and your giving is generous.

Ellie Kay, an MP regular contributor, is author of A Tip A Day With Ellie Kay: Twelve Months' Worth of Money-Saving Ideas (Moody Press). www.elliekay.com

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