Earlier in life, like many young people, I was reckless with money. Once it hit my bank account or my wallet, it was quickly redeposited in a cash register. Matters grew worse when I enrolled in college and became eligible for a student credit card. It had a mere $700 limit, but it took not two months to hit that ceiling. Repayment went $35 per month at a time, an amount I would then re-charge the next month. Add in another credit card, somehow secured later in college, and it meant graduating with not only student loan debt, but also over a thousand in credit card debt -- not easy for an unemployed graduate.
After seeing me wallow around the house for a month or so -- I had no money to go out -- my dad handed me a copy of a book in which I had zero interest. It was the memoirs of Tim Russert, Big Russ and Me. "Just read the first chapter," he told me. It might have been the single best bit of personal finance I've ever read. Not only was it amazingly simple, but it was clearly effective. The story went a little like this:
The Russerts had money, but not much. They could afford some luxuries, but in order to continue affording them they had to keep spending within certain boundaries. Big Russ would sit down at the beginning of every month and write out the family budget on a yellow legal pad. They would then follow the budget to the letter. If an emergency came up, they cut where they could and then factored it into the next month's budget.
That advice isn't groundbreaking, but it instilled in me a sense of fundamental financial planning. Like most people saddled with crippling debt, I had tried to implement many plans in the past. Obviously none of them had helped. But after I read this story, I gained a fuller understanding of how to keep budgets simple. If the entire Russert family could operate using something like this, so could a recent college graduate.
Building from the fundamentals
Of course, the exact method the elder Russert employed wouldn't work in the same way for me. For starters, I not only lose pieces of paper all the time, but entire notebooks. I also need something somewhat editable; the first draft of anything I do is ridden with mistakes and glaring holes. (In fact, that's one reason my previous attempts at budgeting never worked.) At the same time, I needed to follow the fundamentals that Mr. Russert set forth.
In other words, I needed to build on those fundamentals, using tools that have appeared since then. Back in the 50s and 60s, when Big Russ wrote those budgets, there weren't all that many other tools he could have employed. Those that were available cost money, and the entire idea of a budget is to not spend more money than is necessary. Things have changed today, though. There are cheap tools that help you accomplish pretty much anything.
High tech isn't so high tech
Big Russ didn't have the opportunity to set a budget using a computer. Back in the late 50s and early 60s computers were around, but they were the size of entire rooms at worst, refrigerators at best. They cost millions, so no individual owned one. In order to get time on one yo had to pay a lofty sum, or else find a place where you could use it in the wee hours. Neither was an option for a family man, and in any case, and in any case, computer knowledge wasn't free-flowing as it is today.
Half a century later, it's nearly impossible to imagine a time when we didn't have computers at our fingertips. Even as a broke college grad, I had easy access to a computer -- I kept my old college machine in my bedroom. What's funny is that a computer to me is no more high tech than that yellow legal pad was for Big Russ. And so I started using a simple text document, which fulfilled all my requirements. It's simple, I can edit it at will, and it's nearly impossible to lose.
A few months later I had most of my debt paid down. After landing a job I kind of fell off the wagon, enjoying my newfound riches. But when it became clear that I was traveling down that same old path, it was back to the old budget sheet.
The cloud makes tools better
Since thos days, in the mid-00s, things have changed even further. The greatest development for tasks like budgeting has been the cloud. Instead of storing a budget locally on my computer, I can store it in the cloud. That way I can access it wherever I happen to be, on whatever machine I'm using. It doesn't matter if it's my desktop at work, my laptop at home, my smartphone, or my tablet. I can get all of that same information no matter my location.
Smartphones in particular have taken great advantage of the cloud. Search through the App Store and you'll find dozens of iPhone apps for budgeting. Android has even more. And really, they're not that high tech. They're more high tech than a simple text document, but not to an extreme degree. Even those who aren't technically adept can learn to use them in a matter of hours.
The best part is that these new developments are, or at least can be, based on the fundamentals: figure out how much you earn, figure out how much you want to save, allocate your necessities, and then enjoy the rest. The high tech aspect of it, which really isnt' that high tech at all, helps a ton. But it's not necessary, but any means. If you don't lose slips of paper, by all means, take a lesson from Big Russ. It worked for the Russerts, after all.