Family Resource Management
Living for Today — Planning for Tomorrow
News You Can Use
Spring brings to mind the thought of getting into shape. We all want to be healthy and in good physical condition. This takes determination and willpower. The same holds true for financial fitness. Follow these steps to help you get control of your spending habits.
Organization. Find a safe, convenient place to keep all bills and important papers. Keep a notebook, folder, expanding file, or file cabinet. You will also want to keep supplies such as envelopes, stamps, pens, pencils, checks, record book (budget books may be obtained at your local county extension office).
Goals. What are some things you want to accomplish? How much money will you need? How long will it take to reach your goals? Goals are important because they give you direction and purpose for the way you spend money. In setting up your plan, be specific and realistic in writing goals. If you want something that cost $1000; first decide how much you can safely set aside out of your budget each month. If the amount is $100 per month, then you can achieve this goal in 10 months.
Resources. Think about the resources you have: time, energy, talents, knowledge, community resources. How could you use these to reach your goals?
Net worth. To determine your net worth, subtract your debts from your assets. This will help when applying for loans and planning for your financial future. This will also give you a base to work from on your overall financial standing.
Income. Tabulate all income including wages, salary, tips, commission, rental income, dividends, capital gains, social security, child support, alimony, retirement benefits. Find out exactly how much money you can spend each month. Make a budget for each month.
Expenses. Have you ever felt like your money was slipping through your fingers and you didn’t know where it was spent? To gain control of your finances, keep a record of money spent for one month. Divide expenses into categories. You will have fixed expenses that do not vary like mortgage/rent, automobile, cable, etc. Flexible expenses like; food, clothing, gasoline, personal care, entertainment, take out foods are categories you will have more control over. At the end of the month, total all flexible categories to see exactly how much you are spending in each. This will help you pinpoint unnecessary spending and free up money that can be applied towards your goal.
Spending plan. It is important to write down your plan and refer to it throughout the month. Record how much you plan to spend and then go back and record how much you actually spent. This will give you an idea of how well you are able to stick to your plan. You may have some old spending habits you will want to break.
Evaluate. Life is always changing and you will need to review your spending plan regularly and revise it to fit your needs. Life is also about making choices, especially with finances. It’s your money to spend as you wish and there are so many ways to do that. Think about the choices you make today that will effect your tomorrow.
