Family Financial Management – Plan Ahead, Spend Wisely!

Did you make any New Year’s resolutions about your physical health, personal and professional goals or your family’s financial welfare? There are several approaches to dealing with your dollars that can get you on the road to financial independence.

One approach is a seven-step process developed by UF/IFAS Extension Specialist Dr. Nayda Torres –the focus of today’s column. Another way is to use the “Budget Box”, which will be the focus of a seminar on Family Financial Management, to be held on the Seminole Indian Reservation on Thursday January 29^th.

Families have to make decisions about how they want to spend money. They decide what their lifestyle will be. If the home front needs to be as pleasant and as comfortable as possible, money will be spent on the home and its furnishings. Another family might decide that travel is more important, so they may spend their money on going places. There is no right or wrong – there are just different lifestyles.

To carry out a favorite lifestyle, a person should give careful attention to earning, investing, saving and spending money. It requires planning to achieve personal and family goals in each area. Financial success is not so much earning money as it is making wise use of money. Here is how Dr. Torres suggests how a spending plan can work:

Step 1: Set Goals. Decide what you want. List three things you want to do or buy in the future. These are long-term goals. What needs to be done right now are short-term goals. Find out how much each will cost and add them up. Concentrate on reaching your short-term goals, but always keep long-term goals in mind. Start saving on a regular basis so that long-term goals can be met.

Step 2: Keep Records. In order to manage money, keep track of how much is earned and spent. Get into the habit of good record keeping. One way to keep a weekly record is to fold piece of paper into 8 sections. Use one section for each day, with the final portion for a weekly total. Keep your records safe and together in one place, like a file, large envelope, or box. Remember, it is the habit that counts, not the method.

Step 3: Know monthly income. This determines how much money is available to spend and save. Income is available from many sources, such as paychecks, payments from the government, or regular gifts. Realize that the sources and the amounts may change month to month.

Step 4: Know monthly expenses. Use weekly records to summarize how much money is spend every month. There are two major types of expenses: fixed expenses, those paid on a regular basis (e.g. child care, rent or mortgage, or savings) and flexible expenses, those that do not occur regularly (e.g. food, clothing, transportation, recreation, and medical care.)

Step 5: Compare income and expenses. Deduct total expenses from total income for the month. If the result is a positive number, it means that earnings are greater than expenses, and the amount left over can be used for short-term and long-term goals. If the result is negative, and continues that way, it is difficult to achieve these goals since any saving is spent on debt.

Step 6: Change your spending plan. Review income, debts, and spending. Take a hard look at flexible expenses. There are ways to control them by either reducing the need for them or adjusting what is spent on. Simple rule: If the expense helps to reach goals, do it, otherwise, don’t do it!

Step 7: Stick to the plan. Create a new spending plan by changing the current plan. Changing spending plan means changing behavior in spending, and it may not be very easy

Financial Seminar to be offered

The Seminole Tribe Cooperative Extension Service is offering a seminar on Family Financial Management on Thursday, January 29 from 6:00 pm to 7:30 pm at the conference room of Brighton Cattle and Range Office. This class covers setting goals, planning spending plans, and keeping records by using a tool called the “Budget Box” system. Pre-registration is required and the seminar is limited to 12 participants. A registration fee of $5.00 is required to cover materials and light refreshments. Priority will be given to those who have paid registration fee in advance. Cash and check are acceptable (make out to “Seminole Indian 4-H”). Call 863-763-5020 for registration or more information.

If you need additional information on Family Financial Management, call or stop by our office on Highway 721 in Brighton Reservation. Our phone number is 763-5020, and you can email us at ykudo@ifas.ufl.edu

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Note: Yu Kudo is now a County Extension Agent, 4-H Youth in Palm Beach County, Florida.

Trade names, where used, are given for the purpose of providing specific information. They do not constitute an endorsement or guarantee of products named, nor does it imply criticism of products not named. The Florida Cooperative Extension Service - Institute of Food and Agricultural Sciences is an equal opportunity/affirmative action employer authorized to provide research, educational information, and other services to individuals and institutions that function without regard to race, color, sex, age, handicap, or national origin. Florida Cooperative Extension Service / IFAS /University of Florida. Larry Arrington, Interim Dean.

Last update: 02/16/2004 . This page is maintained by Dan Culbert Hit Counter