“I don ‘t know how much I ‘m paying for various things. I don ‘t know how much interest I‘m paying on my credit cards. I don‘t want to know what I‘m paying for all these things. And Judas Priest! How did I run up this bill and in this ghastly amount?”

Have you ever said any of the above?

You can admit it. Most of us have said it at some time in a busy life in which we spent money on so many things, some were useless. I said the above many times in my 20s and 30s. So this chapter is for everyone. It can help you live well below your means. That is one of the goals of a well-planned budget, a budget that also contains some money each month for savings and investment. And the latter doesn’t have to be a lot, but it must be done every pay period over years.

Here, in a dull as dishwater subject called budgeting, is one of the secrets of how some people start with little or nothing, yet end up financially independent, knowing that they can meet every contingency. That’s because they have, through patience and consistent habits over years, developed considerable assets.

Those who budget, those who know how much and why they’re spending, have a much better chance of achieving wealth than those who don’t. That’s according two authors studied wealth creation. They say that those who build wealth all share at least one common characteristic that comes through budgeting: “They (the affluent) live well below their means”. [The Millionaire Next Store. The Surprising Secrets of America’s Wealth,” Thomas J. Stanley, William D. Danko, p3, (Longstreet Press, Marietta, Georgia, 1996)]

In short, they don’t overpay. They don’t engage in impulse buying. They don’t allow screaming tube announcers to change their lives. They don’t buy things just because others are and because they just watched a Larry King infomercial (By the way, Larry King had some bankruptcy woes over the course of his long life. That again proves that even those with big incomes can run into money problems).

Those who don’t waste money are MoneySense people. They know what they’re doing with their hard-earned bucks. And this is a critical factor in the race for financial independence.


Budgeting, how one spends, will help ensure that your means of generating wealth won’t get eaten up in overspending. It ensures that your income won’t be wasted. In other words, you won’t spend money the way the U.S federal government does. Our reckless central government has been recording record deficits and debts that will fall on the shoulders of future taxpayers.

It’s 10 p.m. Do You Know Where Your Money Is?

How you budget or, in some cases, whether you budget or not, can be the most critical factor in whether you can achieve your financial goals. Let’s begin with the idea that, if you don’t have a budget, if you just spend wily nilly, then you are like a person going to a place for the first time without a GPS or a map. You’re just hoping you’ll arrive at the right place at the right time. Your chances of success are not good.

To achieve most goals in life you need a plan. It can be formal. It can be informal. It can be written. It can be oral. But there is an idea, an intelligent thought or set of thoughts, in how one spends money.

For example, my wife, the ever-comely Suzanne Hall, and I went to Las Vegas a few years ago. She wanted to gamble. I didn’t. We agreed on a spending plan. We didn’t make a big deal about it. But we knew what we were going to do and did it.

At the outset, we agreed on a set amount of dollars that could be spent on various things as well as on “gaming.” The latter is the euphemism that casinos and those who push lotteries like to use to promote gambling. The latter is a more accurate term. But tube ads are today often jammed with Newspeak. The latter is the language of Big Brother in George Orwell’s masterful “1984.”

I considered this money as an expense of this trip just as we would pay for food and lodging. We can spend right up to this amount and no more, I said as I gave her gambling dollars.

My wife had a set amount to play the slot machines. She lost it all. She enjoyed herself. She never asked for a cent more. What we agreed on is what we spent and not one cent more. Ni mas. Ni menos.

By contrast, I saw many people in the casinos who obviously weren’t following a budget. They weren’t playing with an intelligent plan or probably any plan except, from time to time saying to a casino employee, “give me another stack of chips.”

And, unlike the people you see on the casino idiot box ads—where everyone seems to be winning, where everyone seems to be a jumping jack, where all the women seem to be supermodels and are jumping into the arms of their delighted boyfriends—almost all those poor souls I saw seemed unhappy or incredibly tired or both.

When you play a game involving quick computations, you’re obviously doing your opponent a great favor by playing when you’re tired and more prone to mistakes, or when you’re guzzling free booze as fast as they can pour it.

Would You Play Some More, Sir?

That’s why the house never asks someone to leave the table when he or she is on a protracted losing streak and still seems to have some money left while big winning card counters are sometimes shown the door. That’s also why the house gives you free booze, but forbids its employees from drinking on the job. By the way, the hotels will often give you cheap rates in Las Vegas. But that means getting to and from your rooms always leads you through their casinos. And they don’t allow their employees to gamble. Can you guess why?

The point is, unlike many of these poor souls in the casinos, we lived with a budget. And, by the end of the vacation, we were happy to leave Las Vegas with the bulk of our lifetime savings and investments intact.

That’s more than one can say for many other poor souls vacationing in Vegas. When we received our credit card bills for our vacation, there was no problem in paying off the entire balance within the grace period. That’s because they were just about the amount we expected. That meant the card company provided us with a short- term zero percent interest loan. We also earned rebate points that we later turned into cash, which slightly reduced the costs of our trip.

Motto of the story: Have a spending plan or budget for any substantial spending event or events. Don’t think of it as a big deal. It can be constructed in any manner. And, if married, it’s vital that both agree since they’re jointly responsible for the household’s income and spending. The couple must recognize each other’s needs and wants, understanding what’s possible within their resources.

Finally, patience is a vital quality in making a budget work, or almost anything else in life. One doesn’t have to have everything all at once. One doesn’t have to take four trips in a year; certainly not to Vegas unless one wants to engage in financial self-destruction. One or two trips can be just fine this year and then you’ll have two more to look forward to next year.

One also doesn’t have to eat out three times a week. Eating out once or twice a week can be just as satisfying, a long-time financial adviser recently told me.

“I had a client who was eating out several times a week. It was just too much. I persuaded him to cut it back to once a week,” according to Lewis J.Altfest, CFP, a certified financial planner in New York City.

You Need a Budget

If you think you earn too much to have a budget or you just don’t need any spending strategy, then you are making a mistake that many big earners and even big shot developers have made. [See the book “Trump: Surviving at the Top.” Trump admits that, at one time when his real estate empire was in trouble, he had less of a net worth than a homeless man who had zero. Trump, through lavish over borrowing, admitted that at one time, in the midst of a real estate recession, his net worth was tens of millions of dollars in the red. Why didn’t his bankers push him into bankruptcy? It might have taken years to unravel what assets belonged to Trump and which to the bankers. They extended more credit and bet on El Donaldo eventually turning around his fortunes, which he did.].

Even many people with big incomes often overspend and get into trouble. That’s what the same financial adviser once told me. And I came across the truth of his comment in a recent story. Altfest generally just advises very successful professionals. These are people who tend to have annual incomes of between $600,000 and $3 million a year. The first time I interviewed Altfest years ago, on a story for “Financial Planning Magazine,” he told me that he spent a large part of his time providing “credit counselling” for these big earners.

I was surprised.

“You’re giving spending advice to rich people who are running up big bills that become unmanageable?”

I asked in amazement. It was the amazement of someone who grew in the Southwest Bronx (the Highbridge neighborhood) and has never made and will never make anywhere near $600,000 a year.

“Yes, certainly,” he replied.

Living with a budget, or some kind of spending plan, is a vital part of the MoneySense philosophy.

Without a budget—or call it a plan if you are bothered by the word budget—you’ll end up reaching into your pocket again and again for your credit card to pay for various things. Often, you’ll spend with no idea of whether you’re putting yourself into dangerous territory until the damage is done. Later, when the card company sends you the bill, you’ll ask yourself: “How did I ever run up such a bill and how can I ever pay the entire bill at the end of the month”?

For millions of Americans, the answer is they can’t, at least not in the short term.
Indeed, the long-term trend among American households has been to go deeper and deeper into hock.

It is a trend we see in many other Western countries. Here in the states, over a 63-year period after World War II, the ratio of household debt to disposable personal income dramatically rose, according to Federal Reserve Board numbers.

“The ratio of debt to equity was $18.6 billion to 97.5 billion in 1945. By the third quarter of 2008 it had reversed big time, with $10.6 trillion of debt stacked up against only 8.5 trillion in equity,” writes George Melloan in “The Great Money Binge, Spending Our Way to Socialism.”
Some 16 percent of households had more debt than equity in their homes, he added. That means they risked default.

That also means the average household’s income was being overwhelmed by household debt. Those numbers have improved for many over the last decade but one should always be on guard for the dangers of excessive debt [For more on America’s debt woes, please see “The New Depression. The Breakdown of the Paper Money Economy,” by Richard Duncan, pp 88-92 (John Wiley & Sons, Singapore, 1992)]

Will These People Ever Dig Out?

It will take many of these debt-plagued households years to dig out. Many never will. The math is against them. Many ran up the debt through credit cards. They are trying to pay down their bills with something on the order of a 20 percent interest rate added to it.

As I write, millions of Americans are still trying to recover from the woes of the Coronavirus of 2020 or from the crash of 2008. Many have houses that are “underwater.” The equity in their houses is less than the debt owed. So it is still important to learn the lessons of troubled times.

The most important is this: Those who budget, those who have a plan, who understand the extent of their bills and prepare to pay them off each month, don’t have that burden. The difference between these two types of people is the difference between walking somewhere carrying bags of heavy groceries as opposed to walking somewhere carrying nothing or very little.

Who would you rather be?

The difference between the latter and the former is tremendous. It is the difference between happiness and misery. It is the difference between lying awake wondering how you’ll ever pay your bills or having a good night’s sleep, secure in the knowledge that your financial affairs are in order.

It is the difference between Money Madness and MoneySense. And one of the ways to arrive at MoneySense is to understand the role of savings, an important element in ensuring one can survive hard times. Savings is a subject we will examine in our next chapter.

Are you enjoying this book? There’s lots more (See the TOC below) Then why not buy the entire book now. For $3 the entire book can be delivered to your computer. Here’s how:

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Here is a table of contents of what is covered inside:

MoneySense: The Tacano Investor


Intro: The Woes of Judy Could Someday Be Your Woes

Section 1: Building Assets

Chapter 1: Lots of People Want Your Assets

Chapter 2: Consumerism, Smart and Dumb

Chapter 3: Budgeting: The Dull Subject That Can Save Your Life

Chapter 4: Saving, Still an Essential Part of the MoneySense Strategy

Chapter 5: Investments Part 1: Taking Reasonable Risks to Achieve Wealth

Chapter 6: Investments, Part 2: Achieving Financial Independence by Beating Taxes, Inflation and Avaricious Mutual Fund Companies

Chapter 7: Getting Started: Using Thrift to Find Investment Money That’s All Around

Chapter 8: Investing Techniques for the Long-Term Investor: Patience Required

Chapter 9 Balance and Patience: How to Go from a Little to a Lot; How to Take the First Steps to Financial Independence

Chapter 10 Where to Invest and How

Chapter 11: Chasing the Hot Fund: How the Average Investor Fails

Section 2: Protecting the Financial Independence It Took You Years to Build

Chapter 1: Easy Credit: The Servant that One Day Could Become a Brutal Master

Chapter 2: A Road Out of Card Hell?

Chapter 3: Grey Charges Can Cost You a Bundle, Another Few Hundred Dollars Are Blowing by You—Why Don’t You Reach Over and Pick Them Up?

Chapter 4: Effective Pre-Retirement and Post Retirement Strategies: Some Retirement Accounts Are More Valuable than Others.

Chapter 5: The Wrong Way to Use Qualified Assets

Chapter 6: Don’t Overrely on Social Security

Chapter 7: Q&A with Social Security’s Chief Actuary Stephen Goss

Chapter 8: Why You Will Always Need Some Cash in Your Portfolio

Chapter 9: Financial Classics Are Important for Anyone, Anytime

Chapter 10: Do You Need an Advisor? How Do You Find One?

Chapter 11: Data Breaches: Destroying Your Good Work


Chapter 1: Investing in the Age of Biden. What Now?

Chapter 2 Principles for the Rest of Your Life


Money Mischief: Economic Problems and the Inevitability of Tax Increases. The Right Way to Get Out of a Depression


Gregory Bresiger
Gregory Bresiger

Gregory Bresiger is an independent financial journalist from Queens, New York. His articles have appeared in publications such as Financial Planner Magazine and The New York Post.