Some folks believe that economics and budgeting are complicated, so they try to avoid creating a budget and talking about something about which they are unsure. My goal is to try to lay those concerns aside.

The basic logic of economics is the same at every level: federal, state, local, and household. Everyone should know the basics of economics in today’s world. Learn the most basic concepts, and you will be a step ahead of most at the federal government level, some at the state level, and sadly, too many of the households around you.

The starting point for each of the groups mentioned above is that you reasonably and conservatively estimate your annual income, then build around that income you must plan to live. The problem is that way too often, in too many governments and households, they need to be more honest about what their income will be.

On the government side, some overestimate revenue projections. In some households, people anticipate raises or overtime pay that may or may not come. However, they don’t plan for the rainy days that will definitely come. Often, they stop depositing money in savings and retirement plans as fully as they can or should. This is much easier to see when looking back rather than as one goes through life.

Consider the federal government. They never get their income (revenues) correct but merrily spend what they projected anyway because there is no way to stop them. This leaves future generations holding the bag. Look at the mess in California, where the Governor regularly overestimates state tax revenues and then must make massive budget cuts. Too often, those cuts come where the money is most needed, such as law enforcement and the prison system.

Thankfully, in Virginia, our constitution protects us from those within who wish to chase every new idea that comes down the road. The General Fund, by our state constitution, cannot exceed revenues. This is also true at the local level. At the household level, sadly, there is no controlling factor unless you get in trouble with your bank or other financial institutions. If they sense a problem, they will deal with it to protect their interest, not your household.

Each year, legislators and the Governor fight tooth and nail to decide the best way to handle tax revenue. Wisely, in Virginia, no one ever tries to over-inflate revenues out of respect to protect the integrity of what must happen. The fight always revolves around where to spend or save.

If the savings and spare money accumulate at any level, they will grow on their own, assisting in future planning. We do that at the state level with the rainy-day fund and an additional fund growing even faster.

When former Senator Ruff was on the Mecklenburg Board of Supervisors, he and my father led an accumulation of several years of excess savings. Therefore, they were able to balance the budget without a tax increase in a tough year when counties around us had to raise taxes.

Returning to the national level, we are now unsure who will be running for President on the Democrat ticket. However, whoever is chosen will focus on how they can attract more votes by bribing them just as the President has tried to with paying off the debts of college graduates at the expense of those who paid their own debt or passing that debt to our children. We know that the candidate will brag about massive spending over the last four years, ignoring the question of who, when, and how we will get out of this massive debt.

TAMMY MULCHI serves as the District 9 state senator. She can be reached at senatormulchi@senate.virginia.gov or by calling 804-698-7509.