I asked students today the best financial advice they had ever received and one student said simply:  “Do not spend more money than you have.”  Pretty simple advice yes, but think about how many financial crises derive from those not following this advice (think credit card debt).  So, my question back to him was “that’s great advice but how come most people can’t follow it?”  Well now we have an answer from USA Today (well, actually three answers) on why we can’t stick to a budget:

1. There’s not enough money coming into the household.
2. Expenses may be higher than you think..and something always comes up (the dreaded one-time expense that you discover recurs month after month).
3. Your budget requires more attention than it is receiving.  I am guilty of this one.  It only takes a month or two of spending more than my budget to get discouraged and lose track of my budget or not want to see how I am performing vs. budget.

This article presents a good opportunity to ask students if they currently budget and if not, the reasons why.

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Check out NGPF’s Budgeting Basics Lesson to learn the fundamentals of budgeting.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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