Friday, December 26, 2014

Budgeting Like a Farmer (the Joseph Plan)

I don't know much about farming or how farmers budget, but I've often imagined that they have to be very disciplined. I've imagined that they get most of their money for the year during a somewhat narrow window of time. Then they have to be disciplined to spread that money out over the rest of the year.

I suspect most of us would find that a bit difficult. Most of us, I suspect, spend it if we have it. Few of us are disciplined like I remember a professor friend of mine several years ago. He budgets for the whole year and then spreads it out over the whole year. So if he plans on spending $600 on Christmas, he'll put aside $50 a month somewhere for the whole year.

I also imagine that Christmas is deeply stressful in many families for whoever keeps track of the money. I wonder how many of us actually track how much we spend. Even talking of $600 for Christmas seems wrong to me, a sign of a culture with its priorities out of whack. But I'm sure many of us spend over a thousand each year--and I'm not talking about people on six figure salaries. What's worse is that many of us probably haven't even added up how much we spend. We may have no idea that we have spent 2% of our yearly take-home pay or more on Christmas.

Anyway, I wish I could say I budgeted like a farmer or like my disciplined professor friend. It's the Joseph plan--put some away in the fat years in preparation for the lean. It might even be worth having a separate account that you kind of forget about until the winter of our discontent.

I'm going to try to do better this year. How about you?

I know, I know, you are already good at this. :-)

1 comment:

Rob Henderson said...

I remember my high school government teacher telling the story of a former student who had a terrible time saving money even though he had a very good paying job after graduation. So he went to the bank and talked to someone for advice on saving.

The bank rep suggested that he take out a loan for a certain amount of money, they would put that money in a special account that he could not withdraw from and then make monthly payments.

It was a win-win/win, so it seems. The young man had money in savings like he desired and the bank was able to make money from the interest (as well as having the use of the his money that they are holding).

So far in my lifetime the best means of budgeting appears to be the "Joseph Plan." But my guess is that most of us struggle to implement what makes the best sense.

Thanks for sharing your insight.