Earning money is great, but spending it properly is even more important.If you pull in the big bucks and just spend it all recklessly, you’re risking walking down a very dangerous path.Budgeting your money, no matter how much or how little you have, is one of the most important skills you can learn.Below are a few sage tips from various financial experts to help you get started.By listening to their words and applying their wisdom properly, you can survive and thrive on even the most meager of salaries.Suze Orman: A 10% Cut in Family SpendingFinancial guru Suze Orman suggests cutting your family spending (or just plain fun spending, for those without a family) by 10% every month.It’s just enough of a cut that you’ll start to see savings pile up quickly, thereby making it easier to pay back debts and cover actual, important expenses.However, it’s not enough of a cut that you’ll feel like you’re depriving your loved ones of anything.Let’s face it — if you’re used to spending $100 on movies and gaming every month, trimming that amount down to $90 a month isn’t going to cause mass wailing and angst.Everybody will still have fun, including your wallet.Dave Ramsey: Overbudget for Groceries The ever-animated Dave Ramsey knows why you budget and save, save and budget, and yet still end up broke every month —you forgot the food.According to Ramsey, when people put together their monthly budget, a lot of them don’t consider their grocery bill at all.And if they do, they severely underbudget, so even though they may think they’re putting $100 aside every month, $80 of that is actually going to num-nums they forgot to calculate.So next time you go grocery shopping, hold onto your receipts, and add them all up at the end of the month (this includes times you ate out, because even though Burger King can barely be considered food, it still technically is.)Whatever that amount if, add $50 to the total, just in case.There’s your real grocery budget, and if you go under, great. That’s always preferable to going over.Ric Edelman: Look to the Past for InspirationRic Edelman wants you to go back in time when forming your budget. Not too far back, obviously — your bills in 1995 aren’t going to be anywhere bear what they are today, after all.But looking back a year? That’s totally doable.Find your bill history from the previous calendar year and add ’em up.If you can find any receipts from extracurricular activities, like the movies or dining out, add them to the final tally.This should give you a real good idea of what this year’s expenses will be as well, and you can budget accordingly.Obviously, if anything huge has changed in the past year (new house with a higher mortgage, new car, septuplets), then adjust for that.But if your life has stayed largely the same since a couple Christmases ago, then this is a fine way to prep for the present.Gail Vaz-Oxlade: “Magic” Spending JarsTough-talking Gail Vaz-Oxlade understands that many people can’t help themselves form spending too much on expendables, and she thinks it’s because they don’t physically see the money.It’s all too easy to just swipe the card, be done with it, enjoy the fun, and get smacked in the face with big bills and overdraft charges later on.Her solution? “Magic Jars.”After you budget for your fixed expenses and important variables (such as debt repayment, gas, and food), take money set aside for entertainment, clothing, dining out, travel, and other similar ventures, and stick it in a jar.Spend only the jar money when partaking in these fun fests (no cards allowed,) and you’ll no longer find yourself surprised by sudden brokeness because you just had to get ten toppings on your extra-large pizza.Mary Hiers is a personal finance writer who helps people earn more and spend less.Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window) Related Post navigation
A version of this blog post also appeared on the Open Government Partnership website.The urgent imperative of tackling climate change is rarely associated with the dry science of budgeting and fiscal policy—but it should be.With the conclusion of the Paris Agreement in December, many sizeable countries—including China, India, Mexico and the United States—made significant commitments to reduce greenhouse gas emissions, and countries made progress toward providing $100 billion in climate finance a year by 2020 in order to help poorer nations mitigate and adapt to climate change. Increasing funding for both adaptation and mitigation is crucial to tackling climate change and for promoting low-carbon, climate-resilient development. However, while most of the focus so far has been on increasing the scale of climate finance, less attention has been placed on two important components of adaptation funding—effectiveness and transparency.Tracking Where the Money GoesOne key aspect of effectiveness concerns systems for managing adaptation finance. Adaptation funds like those promised in the Paris Agreement can help countries invest in climate-smart agriculture, infrastructure to protect land from erosion, alternative income-earning opportunities for the poor, and more. But this increased availability of funds will only be effective if the systems are in place to manage this huge flow of resources in a transparent and accountable manner. Channeling adaptation finance through public budgeting systems is clearly preferable than doing so through parallel mechanisms outside the budget. Participating countries hope this will help them attract larger sums of climate finance for integrating adaptation with other development activities.If the systems are not in place to manage, channel and monitor these financial flows well, at worst, vulnerable people and countries’ economies will fall victim to the adverse effects of climate change. The absence of effective systems and reliable data creates opportunities for corruption through the deliberate misuse of funds. And weak budgeting systems risk generating losses in efficiency through the misallocation of funds or failure to ensure that budget allocations are used for their intended purpose. This risk is even greater when funds are channeled off-budget as the scope for ensuring transparency and oversight is weaker. WRI has recently partnered with the United Nations Capital Development Fund to develop systems for tracking the resilience benefits of adaptation finance that is channeled on-budget to local communities.A related challenge lies in ensuring that a massive increase in spending on adaptation measures translates into sustainable investments on the ground. Research by WRI and partners under the Adaptation Finance Accountability Initiative highlights the paucity of data on budget allocations for climate adaptation. Many developing countries lack systems to account for how they’re spending existing adaptation finance, making it difficult to track investments and monitor financial flows at the local level. National budgeting systems are ill-equipped to perform this basic function.The lack of information on budget flows for adaptation makes it hard for citizens and independent monitoring groups to know whether funds are being used for their intended effect and reaching the populations that need the money most. In Zambia, for example, monitoring groups found that communities were not aware of a planned dam project until it broke ground. The national and local governments had not consulted communities to determine the best use of funding to help them adapt to chronic drought. In the end, the dam caused major disruptions and displacement, and only benefited a very small share of the local population.Creating More TransparencyTransparency is essential for ensuring accountability in the use of climate finance by making budget information available in the public domain and engaging citizens in budget decisions. Encouragingly, we are starting to learn more about budgeting processes and transparency in countries throughout the world. Independent data initiatives like the Open Budget Survey (OBS), sponsored by the International Budget Partnership (IBP), is the fifth round of a global assessment of budget transparency, public participation and oversight institutions for national governments. While 19 countries score well on budget transparency, the survey finds that a number of governments are backtracking on budget transparency commitments, and that “the large majority of the world’s population does not have sufficient access to budget information.” This finding is especially worrying for those countries that are vulnerable to the effects of climate change.Opportunities for public participation in the budget process also remain limited. The OBS reports that “meaningful opportunities for the public to engage in the formal budget process simply do not exist in the vast majority of countries.” This is consistent with findings from WRI research in Nepal, Philippines and Uganda concerning the difficulty local NGOs face in accessing budget information on climate finance to track spending commitments on the ground.The 2015 survey also finds that only a third of countries surveyed actively engage their legislatures in the budget process, and that supreme audit institutions lack oversight of public funds in the majority of countries.But within these troubling findings lies an opportunity. With the new Paris Agreement, the world will see more climate finance than it ever has before. Efforts to improve budget transparency can help to improve the accountability of governments in the allocation and use of these funds. For example, planned outlays in climate action should be published in government budget statements, and the information made available to the public online. Consultation with local people on investment decisions for adaptation will improve engagement and understanding of these priorities. Without such measures, increased funding will not bring about the positive impact we expect for poor people and less developed countries.