The new year is an ideal time to set up a household budget. David McClough, Ph.D., associate professor of economics at Ohio Northern University, can offer common-sense insights for a strategic plan to avoid a New Year’s resolution gone awry.
“It is important to make the budget workable and not overwhelming or daunting. It has to provide a guide you can follow,” McClough said. “I often compare budgets to a fitness regimen. Everyone wants the benefits, but no one likes dieting or working out. You have to be disciplined and remain focused on the outcome.”
In preparing a budget, McClough stresses the importance of priorities. “You need to start with the necessities, like having a place to live, food, utilities, car payment so you can get to work, and those types of things,” he said. “You then have to be careful about what you set aside for outside entertainment, gifts and things that may be extravagances.”
It is also important to have a focus.
“You want to set goals that you can achieve and understand what determines your goals. For example, is it most important to you to accumulate wealth, avoid debt or save money for a particular item such as an appliance, car or your children’s education? The goals provide motivation and determine how you set your budget and what decisions you make.”
McClough combines both financial and media savvy. He has been widely interviewed and has published numerous guest columns and other pieces on issues of finance. He can discuss other relevant topics such as setting a budget for holiday gift-buying and what end-of-the year deals consumers should seek.
