The show: The Cosby Show
The situation: Theo Huxtable shrugs off a poor report card and says he plans to get a job working at a gas station or driving a bus instead of going to college.
To teach his son a lesson about the economic realities of working for a living, Cliff Huxtable gives Theo $1,200 in Monopoly money as a salary and starts subtracting expenses: $350 for taxes, $400 for an apartment, $50 for transportation and $200 for clothing.
With Theo still holding a few bills in his hand, Cliff asks, "So, what does that leave you?"
Theo: " $200. So, no problem."
Cliff: "There is a problem. You haven’t eaten yet!”
The problem: Theo's attitude about money management is all too common: A 2012 Bankrate survey found that 38% of Americans don’t have a budget.
The lesson: Accounting for your money matters.
“Until you get a sense of where your money is going, you can’t make a decision to use it (wisely),” personal finance author Gail Vaz Oxlade says.
To create an accurate budget, Vaz Oxlade suggests gathering up six months of pay stubs, bank statements and monthly bills. Then create a budget that reflects living expenses, debt repayment, savings and splurges.
“If you’re spending more (money) than you’re making, you’re in trouble and need to make some changes,” she says.