The Importance of a Budget.

An interesting pool just came out by Banrate.com asking Americans how they felt about budgeting. The results seem to be a bit contradictory.
In the poll, it was suggested that American’s felt budgeting was very important.  Ninety percent of respondents say it’s “essential” or “very important” to have a personal or family budget.
The poll further indicated American’ understand the virtue of keeping a budget. The idea of what we teach at Prosper is what American’s believe to be important.  “You create a monthly spending plan, and you pat yourself on the back for doing an excellent (or at least a good) job at sticking to it, even when unexpected expenses try to knock you down.�
The question is if the majority of Americans really do adhere closely to a budget. And do most people truly avoid buying non-necessities on credit? If that’s the case, what do they use all those credit cards for?
Maybe the poll respondents were describing how they wish to be, instead of how they really are.
Apparently American’s in are trying to put the best foot forward. They know what they need to do, but are not doing it. “There’s probably a lot of wishful thinking in this response,” says Jared Bernstein, director of the Living Standards Program of the Economic Policy Institute, a Washington think tank.
“I don’t think people were telling the truth in the poll,” says Robin Byford, a certified public accountant and Certified Financial Planner who helps oversee financial literacy education efforts for the Oklahoma Society of CPAs. If people really did stick to carefully prepared budgets, they would spend less and save more, she says. “As a whole, we’re spending more than we’re making.”
“The easy access to credit means the average American doesn’t need to budget any longer, because they can always borrow to meet their needs,” Manning says.
“For people who are spending beyond their means, and doing it impulsively, they’re likely to be using credit cards over any other form of borrowing.”
The study continued to explain the lack of financial education and what must be done about it.
Fortunately, your Prosper coach is hear to help you.