budget interview

I interviewed my mom, a wife, mother and grandma :) .  She has set and managed the budget in my parents house for 30 years.

Q:What is the hardest part of managing a budget?
 A: Actually staying on budget, and being prepared for unexpected events.

Q: How do you anticipate unexpected events?
A: You always have to have enough saved for 3-6 months worth of living.  Once you have that saving established, you continue adding to it, or saving for other things.

Q:  How do you decide how much money should be allocated for each expense, especially when doing something new?
A: I shop around a lot to try and find the most efficient way to do things, or the best deal.  It is kind of fun, like a treasure hunt to find how much money you can save.

Q: What do you do if you go over budget?
A: Thats why it is important to have extra money in a reserve.  Sometimes no matter how hard you try the numbers just don't add up and you spend more then you anticipated.  If you have extra money set aside for that purpose you wont be in a bind when that happens.

Q: Has the change in economy changed how you manage the budget?
A: Yes, we make the same amount of money as we have for awhile, but the cost of living keeps increasing, yet the economy has caused compensation and salaries to not increase to match those cost of living increases.  It has forced me to be more strict with how and what we spend our money on.

I think that this was a very beneficial conversation for me.  Although it dealt with a family budget, all of the answers can be applied to a work environment.  It is especially important to be sensitive to the fact that many companies and people are struggling right now doe the the economy.  More people are getting laid off, and less people are getting hired.  Making a budget and sticking to it can significantly impact the success of a company and make the difference between closing down and staying open through these hard times.