This month, our focus is on knowing where you’re going financially.

The most common financial topic couples have disagreements about is how much to spend on various items.  That’s why it’s essential for husbands and wives to have talked about and agreed to a plan for how they will allocate their income.  A budget is the tool that enables you to do that, helping you pre-determine how much you are going to give, save, invest, and then spend on everything from clothing to vacations.

But let’s face it, for most people a budget has an image problem.  People think of it as something you go on like a diet, as in, “Poor Joe and Lucy, they’re on a budget.”

In truth, using a budget actually leads to great financial freedom. Research has even shown that couples that use a budget, especially a detailed budget, are less likely to have financial disagreements.

For many couples, a budget helps foster a sense of teamwork and keeps them from overspending; for some, it gives them permission to spend more.

A friend of ours named Sheila was so frugal that her immediate answer to just about any opportunity to spend money was, “we can’t afford it.”  But her husband Mike was accustomed to using a spreadsheet to monitor his spending before they got married, and they soon began using it together.  Seeing their finances in black and white made Laura realize that in many situations they actually could afford it, whether “it” was a new pair of shoes or a restaurant meal.  It gave her a newfound freedom with money.

On my web site is a free download on how to set up and use a budget, or as I prefer, a “cash flow plan.”  If you don’t currently use a budget, give it a try.  I am confident you will quickly experience this powerful truth: “The plans of the diligent lead to profit, as surely as haste leads to poverty” (Proverbs 21:5).

Do you use a budget?  If so, what’s been your experience?  Is it the ball & chain that non-budgeters envision?  Or has it added to your sense of financial freedom?

Next month, we’ll discuss the importance of carrying no debt except a reasonable mortgage.

By the way, if you’re engaged or newly married and live in the Chicago area, please join me for the MoneySmart Marriage workshop coming up this October 16^th.  Or, if you know an engaged or newly married couple in the Chicago area, please spread the word.

As reported in The New York Times, ING Direct recently asked 1,000 people (presumably single people) what words would come to mind if they were fixed up for a date with someone described as frugal?  The most frequent response, chosen by 49 percent, was “smart.”  However, more than 25 percent of respondents chose “stingy,” 15 percent selected “boring,” and hardly anyone (less than 4 percent) picked “sexy.”  Clearly, some people see frugality as a virtue while others see it as a vice.

A deeper cut at the data revealed some noteworthy gender-based differences.  More men than women (56 percent vs. 42 percent) associated “frugal” with “smart,” while more women than men associated the term with “stingy” (33 percent vs. 20 percent).

Personally, I’ve never liked the term frugal.  I prefer “money-smart.”  A money-smart person is one who is proactive in managing each expense category, while realizing that the least expensive choice is not always the best deal.  And it’s never money-smart to be a stingy tipper.

By the way, if you’re engaged or newly married and live in the Chicago area (or if you know someone who fits that definition), here’s a great opportunity to make your marriage money-smart.

What about you?  What differences do you see between being frugal and being money-smart?

Hopefully, this will motive people to break the habit of carrying a balance on their credit cards once and for all.  If you need some help, here are links to a five-part series of articles I wrote detailing a Bible-based, practical approach to getting and staying out of debt (Part One, Part Two, Part Three, Part Four, and Part Five).

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Have you used a professional résumé writer?  What other steps would you recommend for finding the best writer for the job?

1. Long-term unemployment.  For those who have jobs, my hope is that one new normal will be continuous learning.  That means everything from taking classes to keeping up with the latest books in our field.  While there’s no such thing as guaranteed employment, there’s much we can do to stay as employable as possible.  A good starting point is to be the absolute best at what we do.

2.    Renting over owning.  I believe the appeal of home ownership will persist, but I hope the new normal will be that homebuyers make smarter decisions about how much house they can afford.  I advocate a 20 percent down payment and a monthly housing payment (mortgage, taxes, and insurance) that requires no more than 25 percent of household gross income.

3.    Saving over spending.  I have my doubts as to whether this one will stick.  I sense that when the jobs picture finally improves, people’s pent up desire to spend will be unleashed.  In order to spur savings, my hope is that automatic enrollment will become part of the new normal for workplace retirement plans.

4.    Staycations over vacations.  See point three.

5.    Higher taxes for the rich.  My guess is we’ll see higher taxes for everyone in one form or another.

A sixth new normal I’d add to the list is the use of a household budget.  Online programs and mobile apps have made budgets easier to use than ever before.  If household budgets become common, that will be one of the best long-term impacts of the recession.

What do you think about the new normals listed above?  What others would you add to the list?