Southwick Research

An Autobiographical Collection of Observations and Investigations

by J. Wanless Southwick, Ph.D.




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Family Budget Strategy

Like almost everyone, my wife Jerrie and I struggled to manage our family budget. We tried a variety of disappointing strategies. One of the smartest things I ever did was to turn the check book and the budget over to her.

When we discovered the book called "Rich on Any Income," it gave us a strategy that really worked for us. The book included a supply of unique budget forms, which fit into our checkbook. The basic concept involved a spending plan, which reserved a part of our regular paycheck into various expense categories for anticipated bills. Using this strategy, when the annual property tax statement came, we had accumulated enough money in its category to pay the bill.

We taught the strategy to our children and shared the ideas with family and friends. Then in 2003 we were asked to teach a lesson on how to use a family budget at our local church. We prepared two handouts for the lesson:


1. A little workbook entitled "How to Thrive on Your Income." It helped identify spendable income and create a spending plan.


2. A "Spending Plan Worksheet" to be used to track spending-category budgets, expenditures, and balances. It could be folded a certain way and kept conveniently in a checkbook.


During the class we learned that some people followed dangerous practices, such as keeping no record of written checks, relying only on monthly bank statements to gauge how much money they could spend. Others used credit cards extensively and seemed to worry more about their credit limit than their ability to make minimum payments.

We were impressed with one mother who had a cash budgeting system that worked very much like ours. When she got money, she literally sorted cash into envelopes. Each envelope was for a specific purpose. When she needed money for something, she would look in the appropriate envelope. If there was money in the envelope she might spend part of it. If the money was gone, she wouldn't spend. Even though she had very little income, she knew her spending patterns and divided her money accordingly. She always knew where she stood financially.

Click here to see a brief outline describing how to use this budgeting system.


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