Market your Books

Hi there,

Comments from some readers of the article, “Budget like a Pro” reveals that budgeting is not an easy task. It also requires commitment and discipline. What are some problem areas that must be mastered to smooth out the process of budget preparation?

“Budget busters” are the potential problem areas that can ruin a budget. Failure to control even one of these problems can result in financial disaster in the home. Examples of budget busters are: housing, food, automobile, debts, insurance, recreation/entertainment, clothing, medical/dental cares, savings and household expenses. This is the first of two articles that review each these budget busters, with recommendations on how to overcome them.


In a corporate setting, cost of producing goods or merchandise in stock represent the highest cost area. While in the service companies, cost of personnel salaries and wages is the highest cost to content with. But in family and personal finance, home or housing is the largest costing head. To make this worse, many families buy or rent a home they can’t afford, motivated by peer pressure or some other pressure. The decision to buy or rent and the location of this property should be based on needs and financial ability rather than internal or external pressure.

As a recommendation, we advise you maintain this cost at 32% of your net annual income. What that means is that for a family with an income of N1,500,000 (per annum). The cost of housing on your budget should not exceed N480,000 (yearly). On no condition should this be exceeded. If it must, be ready to sacrifice some other needs or wants for this, to get your finances in good shape.

ALSO READ  9 Right Ways to Take Risks


The size of each family and their nutritional habits rank food as the next problem area in budgeting. Whatever the style you operate, just ensure you are not buying too much, too little or the wrong type of food. We recommend that this bill should be maintained at 15% of your net income. Suffice it to say that this an ambitious recommendation, kindly watch out for our collection of hints on grocery shopping.


In the words of P.T. Barnum, the average human is a “sucker.” The reason has been that we are unwise in our decision making when it comes to our machines – especially cars. Many families will buy cars they cannot afford and trade them long before their utility is depleted. We swap cars because we want to – not because we have to. Many factors enter here such as ego, esteem, maturity, etc. This should not be so. As a simple rule, your acquisition or disposal of automobiles should not cost more than 15% of your income.


Credit cards, bank loans, and instalment credit are fast becoming traps for many, as in other western countries. It would be a great plus to your financial freedom to work your way out of debt and never return to that part. It would be a great boost if your budget includes 7% for debts repayment.


Insurance should be used as a supplementary provision for the family, not protection or profit. An insurance plan is not designed for saving money or retirement. Ask anyone who assumed it was; the ultimate result was disappointment and disillusionment. Insurance of no more than 5% can be used as an inexpensive vehicle to provide future family income and thus release funds today for family use. In excess, this same insurance can put a family in debt, steal money and transfer dependence to insurance companies.

ALSO READ  Money Management: The Power of Staying Broke



Hits: 30