The ABCs of Budgeting

Simple steps encourage getting ‘back to basics’ during busy summer months

San Mateo, Calif. - As American consumers enjoy school vacations, trips and home and garden spruce-up this summer, reminds them to go "back to basics" with the financial ABCs. "With total U.S. consumer debt over $2 trillion and more than 44 million American households carrying average credit card balances of $8,025, it’s clear many Americans need more astute financial education," says Bradford G. Stroh, Founder of Luckily, financial smarts are easy as ABC: A = Add it up. Begin by understanding what you have. Add up all monthly net household income (the amount left after taxes and other paycheck deductions such as health insurance and 401(k) contributions) to determine how much you have to spend. Then categorize your ongoing monthly expenses into fixed expenses (like rent or mortgage payments), variable expenses that are "must-buys" (food, gas, medicine), savings, and finally, spending money (for unexpected expenses and entertainment). Add those up to understand your cost of living. Subtract expenses from income. If that number (your bottom-line cash flow) is negative or does not help you achieve your short- and long-term financial goals, do a "gut check" and find a way to either increase your income or reduce your expenses. B = Budget, budget, budget. If you’ve followed "A," your budget already is halfway done! At the beginning of the month, map out how you will spend your money in the coming month. That’s a budget. "Don’t forget to pay yourself first," Stroh reminds consumers. "Be sure to add a category for savings, and guard it fiercely." C = Cash won’t crash. If you’re among the Americans carrying an average of 16.7 credit cards -- and using them -- put away the plastic. Cash out your spending money in cold, hard bills, and don’t touch the plastic for discretionary expenses like clothing, movies, coffee, dining out or happy hour. Most importantly, never charge more than you pay off at the end of each month. To further support financial literacy, has developed a 16-page guide titled "Debt Freedom: Budgeting & Financial Tools for Today’s Consumer." The guide provides advice on understanding cash flow and debt, defining a budget/spending plan, and setting goals to attain financial freedom. The guide is available electronically, at no charge, by e-mailing Based in San Mateo, Calif., is a free one-stop online portal where consumers can educate themselves about complex personal finance issues and save money by choosing the best-value products from a network of qualified service providers. Since 2002,’s partner company, Freedom Financial Network, has provided consumer debt resolution services, serving more than 7,500 customers nationwide and managing more than $250 million in consumer debt. The company’s co-founders and CEOs, Andrew Housser and Brad Stroh, were recently named Northern California finalists in Ernst & Young’s 2006 Entrepreneur of the Year Awards.