Creating an effective budget is essential for managing personal finances, achieving financial goals, and ensuring financial security.

Since I am retired my budget goals is much different than when I was working and raising a family. Before I retired my goal was to pay off all credit cards before retirement. Credit card interest rates can drain a large portion of your income. After retirement all credit card amounts are paid off every month.

Before retirement I did attempt to budget the money, but it is difficult to do since many unforeseen circumstances enter your life. I was fortunate enough to work most of the time during my working years. I did have a period of time about 6 years where I did not have a stable job, and my finances fell about $30,000. Other than that, I was fortunate to have a stable working life. Times have changed and it appears that the American dream is farther out for one to reach.

After retirement we attempt to spend no more than what our fixed income is. Vacations and special expenses come out of our savings and investments. We do have a home equity line of credit available in case some medical surprise arises or some other unexpected expense. However, in the last eighteen years we have not had to tap into it.

Finally, my advice is try to avoid paying credit card interest charges. 18 percent or more interest rates are outrageous and should be outlawed.