New Survey Reveals Americans Want to Get Out of Debt But Don’t Stick to A Budget

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“I have a good idea of what I can afford, so I don’t need to budget.” According to the Money for Life Survey, 57 percent of respondents who don’t regularly maintain a budget share that idea. Yet, consumer debt levels continue to rise, with the most recent figures indicating credit card and car loan debt at about $18,700 per household, clearly indicating that there is a need for increased budget and spending management among Americans. People are simply continuing to spend more than they make.

According to the survey, conducted by Impulse Research, 23 percent of respondents begin the year budgeting, but lose momentum as the year progresses, while 21 percent say it is difficult to maintain a budget with more than one person making purchasing decisions and using the same accounts. But author Steven B. Smith says budgeting doesn’t have to be so difficult. In his new book, Money for Life: Budgeting Success and Financial Fitness in Just 12 Weeks ($14.95 Dearborn Trade, April 2004), Smith advocates a back-to-basics approach, based on the envelope method, to tackle spending management.

While 59 percent of respondents report regularly maintaining a budget, only two percent of survey respondents use the envelope method, and most (35 percent) use a paper system to balance their budget. “Many people are unfamiliar with the envelope method of budgeting,” said Smith. “But using this method is one of the simplest ways to create and manage a budget. With the help of the Mvelopes® Personal online budgeting system, spending management is made even easier.”

The envelope budgeting method is based on using envelopes to divide money on hand, into spending accounts. Each envelope is then targeted toward a specific expense- car payment, telephone bill, rent, etc. When money is needed, it is taken from the appropriate envelope. For example, when the ‘dining out’ envelope is empty, consumers are faced with a choice: either take money from another envelope, or skip eating out for now. “Budgeting doesn’t have to be about restrictions or limits. What it really comes down to is having the critical information needed to make informed spending decisions,” adds Smith. “It’s about making smarter choices.”

Money for Life takes readers on a financial journey via fictional characters, Ryan and Christine Richardson and illustrates how anyone, regardless of household income, can use the principles of an envelope-based budgeting system to achieve not only financial fitness but financial freedom as well. With people vowing to save more money (63 percent), pay off debts (51 percent), and put more money toward retirement (23 percent) in 2004, it’s clear that financial freedom is a hot topic with most Americans. Smith also shows how today’s technology can improve spending management by increasing awareness of money earned, spent, and saved on a monthly, weekly and even a daily basis.

Money for Life also introduces tools that will help readers successfully plan ahead and manage their spending, while regaining control of their financial life. In addition, readers will learn how to plan for unexpected expenses and emergencies, as well as how to stop accumulating debt and plan for debt elimination.

The Money for Life Survey, conducted by Impulse Research, polled a sample of 1,201 adults nationwide. MOE +/- 3%

Steven B. Smith is chairman, president and chief executive officer of In2M Corporation, a financial software and services company that he co-founded. For the past fifteen years, he has been actively involved in assisting and educating people in personal and small business financial management. Before starting In2M, Smith served as a senior member of the executive team at Megahertz Corporation. He also helped found two additional successful ventures, Floppy Copy and DeltaValve. Smith holds a finance degree from the University of Utah.

Money for Life ($14.95, 208 pages, paperback, ISBN: 0-7931-8793-1) will be available soon at neighborhood and online booksellers or by calling 800/245-2665. Additional information about the book can be found at www.moneyforlifebook.com

Dearborn, a Kaplan Professional Company, is the nation’s premier trainer and information provider for business and financial leaders committed to profiting from breakthrough ideas