The Budgeting Gap

By Ethan Grubelich

Grade 5

Teacher: Jeannie Morton

I’m relaxing on a sandy beach in Miami, lying on a cozy beach chair underneath the leafy, shady palm tree.  I’m sipping fruit punch from a coconut and reading my dad’s newest issue of Time Magazine.  After all, it is spring break.  I’ve got all the time in the world to just sit back and relax.  As the ka-kaws of the soaring seagulls fly smoothly through the wind like music to my ears, a sudden invasion of dreaded thought enters my mind.  I look at the magazine and pull my sunglasses down the bridge of my nose.  It says right on the front page that there is a debt crisis in America.  A horrible, horrible question pops into my head.  “Will we be able to afford this luxury suite in years to come?”  Just the thought of it makes me feel as though an enormous, dark cloud cast a dark shadow over the beach, and I feel a chill creep down my spine.  Now that I think of it, does this mean my parents aren’t putting their foot down and saying no when I ask for new toys?  Are they, like the rest of these Americans, getting themselves into huge debt?  Who’s paying for our suite at The Alexander Hotel?

I close the magazine with twitching fingers and chattering teeth as I put it back into my Adidas backpack.  I lie down under my towel, close my eyes, and dream  . . . a dream of budgeting. 

According to www.wikipedia.com, the U.S. government earns about $1.8 trillion a year from American taxpayers and spends about $2.3 trillion putting them in debt.  We are borrowing money from other countries, which is causing a fall in the stock market, and leaving our government bankrupt.  If our country is struggling with budgeting, it’s no wonder that a large percentage of people aren’t that great at handling money either.  That means that adults and students should be taught to budget.  People should be educated in budgeting so they don’t lose their jobs and their homes.   I also don’t want anyone else to experience what was happening to me as I look at the front page of my magazine experiencing terror of the government’s monetary depression.  Even Republican candidate, Ron Paul, said, “We have to teach our future generations because they are our future.”   If we don’t educate kids about money management, they will grow up to run the country and the government will slowly collapse.                                                                         

In my opinion, budgeting is important because you’re keeping track of how much you’re spending and saving.  I once heard that it isn’t how much you earn that counts, it is how you spend your earnings that will affect your financial management.  In this way, you can keep track of what you’re going to buy, how much it costs, and how much you’re going to save.  I also know that if you don’t start budgeting soon, then it will be hard to handle money as an adult in real life.  If you can’t handle money, then you won’t be able to provide a stable home or feed your family.

How does budgeting work?  You can begin by keeping track of your spending and earnings.  Even if you save only 1 or 2 dollars at a time at first, it still feels good to turn over a new leaf and start budgeting.  But still, you must remember that there are two categories in savings: “needs” and “wants”.  “Needs” are what you have to have to survive.  For example, buying grocery from the store or paying rent for your home are considered needs.  “Wants” are things that you want that are not necessary, like the new Nintendo console coming out soon.  If you stick to buying only what you need and cut down what you want, then you will be able to maintain a healthy budget.

When I get birthday money I put it into my bank account.  First of all, I think it is important to put my money in the bank because I know that as soon as I open up a bank account I’ll get paid interest.  Interest is when the bank pays me for their use of my money over time.  It’s also important to put my money in the bank as soon as I get it, otherwise I’ll be itching to spend every cent right away leaving me on the trail to bankruptcy.

As these thoughts are bouncing around my head, I pull my beach towel off my face and look around.  The sun has come out from behind the clouds again and things are looking shiny.  I realize that there’s nothing to be afraid of if I face my fears.  Budgeting can be a scary thing, but we can take things in steps and it can be managed.  First, understand your earnings and spending habits.  Next, remember what you need and curve your wants.  Then save for your future to protect yourself from falling into the . . . budgeting gap.