Home Management: Why Budget? (1950)

[Music] everywhere we go in this land of ours we see people old people young people people of all descriptions there are many different kinds of people each person has different interests different desires yet there is one thing nearly all have in common something which all share what could it be what could J D Perry president of the First National Bank wealthy and influential citizen of his community share with Joe Clark day labor or what could Joe Clark have in common with Betty Wilson pretty young stenographer in what respect are these three alike just this they all want things that money can buy take Betty for example she wants lots of things that money buys but Betty is like most people there's one thing that she wants more than anything else Betty wants a new fur coat she knows that the coat she wants is very expensive but she can't help dreaming about it JD wants something too for not even he has money enough to buy everything he wants JD has in mind a small airplane one he could pilot himself which he could use for both both business and pleasure Joe Clark has a different desire what he wants is to be able to send his son to College of course Joe wants a lot of other things too but educating his son is his great ambition most people want some things more than they want others is there anything that will help them to get the things they want most the answer is a budget but how can a budget do this is it Magic first just what is a budget a budget is a plan for spending designed to give the maximum satisfaction for a given income JD Perry is budgeting so that he can buy that airplane he has several incomes and many expenditures so his budget is written on paper but that is not necessary for everyone right here is Betty Wilson's budget all in her head her income is the same every month and her expenditures are simple so she doesn't keep a formal written budget hers is an informal mental budget her only writing may be keeping her checkbook stubs that doesn't mean her budget is not a good it is every bit as good for her as JD Perry's written complicated form is for him but how can a budget accomplish this maximum satisfaction let's see what happened to Mr Perry when a car salesman took him in to see the latest model JD's car is 2 years old and it's nothing like this gleaming Beauty JD was tempted but wise man that he is Mr Perry told the salesman that he'd have to think it over when he got home that night he consulted his plan for spending he found that if he bought the car he'd have to postpone paone buying the airplane the airplane was what JD had decided he really wanted so he decided not to buy the car his budget made him realize that he couldn't have both right away his budget helped him steer a straighter course toward his goal recently Betty Wilson and a friend found themselves going to the drugstore almost every evening for sodas Betty loves chocolate sodas but one evening she counted the cost for a whole year she was amazed she found that even though one soda costs very little her sodas for a whole year cost more than she had thought possible now Betty must decide whether to go on drinking sodas or have her coat a little sooner the budget will not decide this for her but will show her that she must make the choice the budget helps people to buy what they really want instead of spending money on lesser desires Joe has a different problem remember Joe doesn't make much money and what he does make has to go a long way he's saving for that boy's college education should he buy the new roller skates the boy want so much Joe decides that if he and Mrs Clark stay home from two movies their budget has already provided for they can buy the skates Joe and his wife know that buying the skates will not reduce their savings that's another good thing about a budget people know where their money is going they need not feel guilty about buying worthwhile articles there's another way in which a budget helps too Betty Wilson knows that there is a way for her to buy her fur coat tomorrow if she wants to she could buy it on the installment plan but Betty knows that this means paying interest and carrying charges she knows that a $200 coat could easily cost much more when bought on the installment plan so Betty decides to save a head for her coat her spending plan her budget has encouraged her to avoid the extra costs of buying on time so each month she adds to her fur coat fund a good budget helps people in several ways but what is a good budget a good budget is a family affair Joe Clark found that his wife had a lot of valuable ideas and was was fully as interested in the family finances as he was your budget must be simple as simple as you can possibly make it if it isn't you're likely to give up and discard the family budget entirely your budget must be elastic it must be able to accommodate the changing conditions of your life for example one night a young man called on Mr Perry asked him to invest some money in a new business after looking at the figures JD decided the opportunity was too good to pass up so he accepted the young man's proposition his budget needed a little revision but it was elastic enough to accommodate a change in plan a good budget must be realistic it must leave a margin of safety for possible illness or other emergency it must leave a margin for impulse buying of which almost everyone is guilty at times no matter how good your budget is it can't help you if you don't stick to it when the Clarks first started budgeting Joe came home one night with a new shotgun it cost a lot of money money which was not included in the budget at the end of the month Joe got a letter from the landlord he had to sell the shotgun in order to pay the rent if Joe had consulted his budget he would have discovered that he could not afford the gun at that time Joel learned that his budget could help him only if he let it help him only if he was willing to stick to it no a budget is not magic it cannot give you everything you want but it can if properly used help you to reject the things that will not give you the greatest satisfaction it can help you to recognize your everyday extravagances it can help you to know where you stand what you can afford and what you can't it encourages you to save ahead instead of mortgaging your future income whether you want an airplane as JD Perry did a new fur coat as Betty Wilson wanted or a college education as Joe Clark wanted for his son you're more likely to get what you want if you plan your spending if you use a [Music] budget [Music]