Diann Douglas: Resolve To Improve Your Finances

Improving personal finances is one of the top resolutions most people identify for the New Year. Setting a goal to get into better financial shape will provide long term stability for your family. The Federal Consumer Information Center has some great ideas to get you started on the right track. First step, you need to determine where you are right now. Add up your total take-home pay per month, this is the amount of money you have to pay monthly bills. Find a simple method to record all of your expenses. At the end of a month, add up your total expenses and subtract them from your total income. Is it a plus or minus? If you are running short, you may need to trim flexible expenses. Those are the bills that change each month; food, utilities, and clothing are all examples of flexible expenses. After you crunch the numbers, come up with a spending plan and stick to it. If you aren’t sure how to develop a plan, we have fact sheets at the Extension office that can help. You can also call and make an appointment for an individual session to learn the basic steps. If you don’t have enough money to make ends meet, keep track of your spending for three or four weeks. Fold up a sheet of paper and keep it in your wallet, then each time you take out your wallet to make a purchase, write the date, what you purchased and amount you spent. By doing this exercise you may be shocked at the amount of money you spend without thinking about it. Mindless spending can cause a lot of cash to slip through your hands. Once you discover where you are spending money, you can make adjustments. Another step in controlling your finances is to get yourself organized with a filing system. If you don’t have a system for keeping records, you can waste a lot of time searching for important papers. How you organize and maintain your records are a personal choice, the important thing is to know where the information is located. Review your active records annually and discard or update the information. If you maintain records on a computer, have a back-up plan in case electronic files are erased or hard copies are destroyed or lost. Consider a safety deposit box for legal papers, contracts, deeds and wills. Another task to do in January is to go through old files and get rid of records that are no longer useful. Financial specialists suggest tossing old salary statements, expired warranties and any other out of date records that are taking up space. Keep unpaid bills, credit card statements, current bank statements, health benefit information and insurance policies. Shred all personal business before you toss it. Once you organize your records, take the next step and calculate your net worth. This is a matter of adding up all of your assets and subtracting all of your liabilities. If you need a worksheet to help record everything, we have a net worth statement form available through the Extension office. Next, take a look into savings and investment strategies. If you don’t have a savings, you may want to work on putting money into a simple savings account for a rainy day fund. This type of savings gives you money to pay for unexpected expenses like a car repair. Investing money takes you a step further than simple savings to help your money grow and requires research and careful thought. It may be advisable to seek the advice of a professional financial advisor. All of these steps will have you get organized and work to make your money go where you want it to go. If you stick to it, you will be paying bills on time, reducing debt and putting money into savings. Once a plan is working for you, you’ll be in better fiscal shape for the year. If you need assistance with more information on money management, contact the Madison County Extension office. The University of Florida Extension/IFAS – Madison County is an Equal Employment Opportunity Institution.

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