Financial Literacy 2007 - Budgeting
A cartoon guy in red carrying a large piece of a coin and a blue background
smart spending
Women and Westerners believe in budgets

It makes sense that it's harder to stick to a small budget than a big one, especially when unexpected expenses come into the picture. The poll results reflect that sentiment: Of the people who say they do a fair or poor job at living within their budget, more than half (54 percent) blame unexpected expenses. Only one-third (36 percent) of those who say they do an excellent or good job feel the same way.

Who follows a budget?
Of the people who say they budget, three-quarters say they do an excellent or good job of sticking to it.

Source: Bankrate.com 2007

The result of one question begs for a follow-up study. Respondents were asked if they agree with this statement: "Budgets are only for people who don't have very much money." There was agreement from about one-quarter (24 percent) of those who don't have very much money -- people who earn less than $25,000 a year. But among people making between $50,000 and $75,000, only about 6 percent agreed with that statement. Do low-earners believe they wouldn't need a budget if they doubled or quadrupled their income? Are middle-income people disillusioned?

Finally, respondents were asked if they agree with this statement: "Life is too short to deny yourself pleasures just because you don't have money right away." There's a double negative in that sentence (deny -- don't have), making it a bit hard to follow when people disagree.

Living without a budget
Seventy percent of those who don't budget say they do an excellent or good job of living within their means.

Source: Bankrate.com 2007

So interpret the statement this way: "It's OK to buy non-necessities on credit." Do respondents agree or disagree?

Thirty-nine percent of Americans agree that it's OK to buy non-necessities on credit, while 61 percent say it's not OK. That seems rather hard to believe, given the popularity of credit cards, six-year auto loans and home equity lines of credit. Almost half (47 percent) of those age 18 to 34 think it's acceptable to buy now and pay later, while only 32 percent of those 35 and older agree.

Ah, to be carefree and young! Or, as Shakespeare wrote: "A man loves the meat in his youth that he cannot endure in his age."

What's your experience with budgeting? Are you struggling? Successful? Share your story.

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