Finance & Loans

A lesson you can learn from the Federal budget

President Barack Obama forwarded his 2013 budget to the Congress on Monday, February13, 2012. It predicts a whopping $1.3 trillion deficit for Fiscal 2013. If the Congress is unable to reach a compromise, mandatory across the board cuts that was agreed previously will go into effect.

The budget proposal includes “Mandatory” and “discretionary” spending programs. Federal government’s mandatory programs include Social Security, Medicare, Medicaid, and federal workers (civilian and military). Now take a look at your monthly expenses. You have your mortgage; health, property, and vehicle insurance; and others. Even they are compulsory, you can take a look at ways to reduce the monthly payment. Look at refinancing your mortgage to lower your monthly payment. Also, you can shop around for better rate on your various types of insurance policies.

Let’s look at “discretionary” spending. The Federal discretionary spending is set each year through appropriations. The current divided Congress may not be able to reach a compromise on this, especially in an election year. You are more fortunate than the Congress. You can review your discretionary spending such as eating out, going to movies, and other social activities. Tighten these spending during difficult times to manage your finances.