New Year's morning approximately ninety-two million people in these
United States will make another stab at keeping personal and household
accounts for the coming year.
One month from New Year's there will be approximately seventy-three of
these accountants still in the race (all started). Of these, sixty
will be groggy but still game and willing to lump the difference
between the actual balance in their pockets and the theoretical
balance in the books under the elastic heading "General Expenses" or
"Incidentals," and start again for February. The remaining thirteen,
who came out even, will be either professors of accounting in business
schools or out and out unreliable.
This high mortality rate among amateur accountants is one of the big
problems of modern household efficiency, and is exceeded in magnitude
only by the number of schemes devised to simplify household
accounting. Every domestic magazine, in the midst of its
autobiographical accounts of unhappy marriages, must needs run a
chart showing how far a family with an income of $1,500 a year can go
without getting caught and still put something aside for a canary.
Every insurance company has had prepared by experts a table of figures
explaining how, by lumping everything except Rent and Incidentals
under Luxuries and doing without them, you can save enough from the
wreckage of $1,200 a year to get in on their special Forty-Year
Adjournment Policy.
Those publications which cannot get an expert to figure out how much
you ought to spend per day will publish letters from young housewives
showing how they made out a budget which in the end brought them in
more money than they earned and had the grocer and electric light
company owing them money.
The trouble with all these vicarious budgets is that they presuppose,
on the part of the user, an ability to add and subtract. They take it
for granted that you are going to do the thing right. Now, with all
due respect to our primary and secondary school system, this is
absurd. Here and there you may find some one who can take a page of
figures and maul them over so that they will come out right at the
bottom, but who wants to be a man like that? What fun does he get out
of life, always sure of what the result is going to be?
As for me, give me the regular method of addition by logic; that is,
if the result obtained is twelve removed from the result that should
have been obtained, then, ergo, twelve is the amount by which you have
miscalculated and it should, therefore, be added or subtracted, as the
case may be, to or from the actual result somewhere up in the middle
of the column, so that in the end the thing will balance. And there
you are, with just the same result as if you had worked for hours over
the page and quibbled over every little point and figure. There is no
sense in becoming a slave to numerical signs which in themselves are
not worth the paper they are written on. It is the imagination that
one puts into accounting that makes it fascinating. If free verse, why
not free arithmetic?
It is for the honest ones, who admit that they can't work one of the
budget systems for the mentally alert, that the accompanying one has
been devised.
Let us take, for instance, a family whose income is $750,000 a year,
exclusive of tips. In the family are a father, mother and fox terrier.
The expenses for such a family come under the head of Liabilities and
are distributed among six accounts: Food, Lodging, Extras, Extras,
Incidentals and Extras. For this couple I would advise the following
system:
Take the contents of the weekly pay envelope, $14,423.08 (if any one
is mean enough to go and divide $750,000 into fifty-two parts to see
if I have got it right, he will find that it doesn't quite come to
eight cents, but you certainly wouldn't have me carry it out to any
more places. It took me from three yesterday afternoon until after
dinner to do what I did). Take the contents of the envelope and lay
them on the kitchen table in little piles, so much for meat, so much
for eggs, so much for adhesive plaster, etc., until the kitchen table
is covered. Then sweep it all into a bag and balance your books.
Balancing the books is another point in the ideal system which often
makes for trouble. Sticklers for form insist that the two sides of the
page shall come out alike, even at the expense of your self-respect.
It is the artificiality of this that hurts. No matter how much you
spend, no matter how much you receive, at the bottom of the page they
must add up to the same thing, with a double red line underneath them
to show that the polls are closed.
But since this is the accepted way of doing the thing, we might just
as well concede the point and lay our plans accordingly. First take
the sum that you have left over in the household exchequer at the end
of the mouth. Put it, or its equivalent in check form, on the table in
front of you. Then, working backward, find out how much you have spent
since the first of the month. This sum is the crux of the whole
system. Divide it into as many equal parts as you have accounts. For
instance, Food, Rent, Clothes, Insurance and Savings, Operating
Expenses, Higher Life. If you can't divide it so that it comes out
even, tuck a little bit on the Higher Life account. And, as the
student of French says," _Voilà_" (there it is)!
Perhaps you have wondered what I meant by "Higher Life." I have. It
might be well to state it here so that we can all get it clear in our
minds. Under the "Higher Life" account you can charge everything that
you want to do, but feel that you can't afford. If you want to take in
an inconsequential theatrical performance and can't quite square it
with your conscience, figure it out this way: By going to that show
you will become so disgusted with the futility of such things that you
will come out of the theater all aglow with a resolve to do a man's
work in the world just as soon as you have caught up with your sleep.
Surely that comes under "Advancement" or "Higher Life."
Insurance budget helps always include under "Advancement" money spent
for lectures. Now, it may be that I have drifted away from the big
things in life since I moved out into the country, but somehow I can't
just at this moment recollect standing in line at a box office for a
lecture. But then, my home life is very pleasant.
Lectures would be a very convenient heading, nevertheless, to have in
your budget. Then, any little items that slip your attention during
the month you can group under lectures and mark off ten paces in your
advancement chart.
By way of outlining beforehand just what you can spend on this and
that (and it is usually on "that") it might be well to take another
family with a representative income. Let us say that there are four in
the family and that the income is about $1,000 per year too small. If
such a family would sit down some evening and draw a chart showing
father's earning capacity with one red line and the family spending
capacity with one black line, they would not only have a pleasant
evening, but they would have a nice, neat chart all drawn and suitable
for framing.
There is one little technical point that the amateur accountant will
do well to remember. It gives a distinction to the page and shows that
you are acquainted with bookkeeping lore. It is this: Label your
debit column "credits" and your credit column "debits." You might
think that what you receive into the exchequer would be credited and
your expenses debited, but that is where you miss the whole theory of
practical accounting. That would be too simple to be efficient. You
must wax transcendental, and say, "I, as an individuated entity, am
nothing. Everything is all; all is everything." There is a
transcendent Account, to which all other accounts are responsible, and
hence money turned over to the Cinnamon Account is not credited to
that account, but rather debited to it, for Cinnamon hereby assumes
the responsibility for the sum. As money is spent for Cinnamon, its
account is credited, for it is relieved of that responsibility. Don't
start wondering where the responsibility finally settles or you will
throw something out of its stride in your brain.
[Illustration: "They would have a nice, neat chart suitable for
framing."]
Some people profess to scoff at the introduction of bookkeeping into
the running of the household. It is simply because they never tasted
the fascination of the thing.
The advantage of keeping family accounts is clear. If you do not keep
them you are uneasily aware of the fact that you are spending more
than you are earning. If you do keep them, you know it.