Deena Katz, associate professor of personal financial planning, has a philosophy she calls trade-off budgeting.
Trade-off budgeting is meant to encourage people to look at fixed money, the amount of money that must come out every month for essentials, and discretionary money, the money left over.
“If you go on a diet the first thing you think of is what you can’t eat,” Katz said. “When you go on a budget the first thing you think of is what you aren’t going to be able to do anymore.”
Trade-off budgeting is not intended to be resisted or imposing; it is recognizing what one is willing to give up in order to save for something else.
“Money has an amazing ability to fly out of your pocket the minute you put it in,” Katz said. “You want to make sure you have money that is specifically pinpointed for what you need.”
Saving money is more meaningful when there is a goal to save for. Katz remembers as a child saving 10 percent of her allowance, but it had little meaning until she wanted a new toy. The same goes for people saving to buy a house, or for retirement, because their money is going toward a specific purpose.
“In a budget, most of the time, people start out and have no clue where their money is,” Katz said.
Knowing what debt and spending look like individually will help determine the financial objectives one plans to make and the trade-offs that must be endured to get there. Consciously making decisions about money will help work toward financial goals.
Find Texas Tech news, experts and story ideas at www.media.ttu.edu and on Twitter @TexasTechMedia.
Contact: Deena Katz, associate professor of personal financial planning, Texas Tech University, email@example.com, or (806) 742-5050, ext. 237.
Audrey Rickel | Newswise Science News
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
For the first time ever, a cloud of ultra-cold atoms has been successfully created in space on board of a sounding rocket. The MAIUS mission demonstrates that quantum optical sensors can be operated even in harsh environments like space – a prerequi-site for finding answers to the most challenging questions of fundamental physics and an important innovation driver for everyday applications.
According to Albert Einstein's Equivalence Principle, all bodies are accelerated at the same rate by the Earth's gravity, regardless of their properties. This...
An important step towards a completely new experimental access to quantum physics has been made at University of Konstanz. The team of scientists headed by...
Yersiniae cause severe intestinal infections. Studies using Yersinia pseudotuberculosis as a model organism aim to elucidate the infection mechanisms of these...
Researchers from the University of Hamburg in Germany, in collaboration with colleagues from the University of Aarhus in Denmark, have synthesized a new superconducting material by growing a few layers of an antiferromagnetic transition-metal chalcogenide on a bismuth-based topological insulator, both being non-superconducting materials.
While superconductivity and magnetism are generally believed to be mutually exclusive, surprisingly, in this new material, superconducting correlations...
Laser-driving of semimetals allows creating novel quasiparticle states within condensed matter systems and switching between different states on ultrafast time scales
Studying properties of fundamental particles in condensed matter systems is a promising approach to quantum field theory. Quasiparticles offer the opportunity...
19.01.2017 | Event News
10.01.2017 | Event News
09.01.2017 | Event News
23.01.2017 | Process Engineering
23.01.2017 | Physics and Astronomy
23.01.2017 | Life Sciences