Around this time each year the newspapers fill columns speculating about what politicians throughout the country – state and federal – are going to include in their annual budget in the way of handouts.
There is very little that any of us can do to have a significant influence on what the State, Federal and even Local Government treasurers will do with the money that they will extract from us by way of taxes and other money raising means.
What we can have a significant influence on is what we can plan to do with our own income and expenditure (BOTH of them).
Predictable income should be the starting point of all budgets – government, corporate and DOMESTIC. Apart from a Federal Government, all other budgets are governed by the facts that they cannot arrange the creation of money and that any deficit created has to be paid for by loans. These loans will have to be paid back out of future expenditure budgets which will rely either on good management or otherwise good luck, both of which are remarkably unpredictable.
Charles Dickens’ character Mr Micawber laid out a perfect picture of the effects of good budgeting:
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
Best to start your budget with security of income!