Many of us feel added stress and anxiety about our financial future as talk of high consumer debt, falling housing prices, increases in the cost of living, and declining retail sales bring up worries about the nation’s economic health.
Learning positive money management techniques can help you and your family adapt to tough economic times. Sometimes people try to ignore financial problems and hide them from their family members. Not facing the problem can be destructive because the worry and stress caused by financial uncertainty and lack of cash may be worse than the financial problem itself. Despite the discomfort, it's important to look realistically at your situation and actively seek solutions to problems.
A spending plan is a tool to help people get control of their money and their lives. It can help you manage the money that you have and put the “needs “before the wants.
Three steps are essential before you begin to develop your spending plan.
Involve the family. Because spending decisions affect the whole family, talk with your family about the situation. Help them understand that all family members need to adjust their spending habits. Involve everyone in deciding spending priorities. If family members understand the tough choices that must be made and have a voice in making the decisions, they will be more willing to accept the decisions.
As your family talks about what is most important, be sure to listen to what they say. Supporting each other can help you pull together as a family and get through these tough times.
Designate a business area in your home. A home business center is a place in the home set aside for planning and filing your household business records, including your spending plan. A home business center is the first step to getting organized. It helps save time and energy as well as money by keeping all the records and necessary equipment in one place.
Collect information. Because people tend to overestimate their income and underestimate their expenses about your income and expenses for two or three months.
With facts in hand you can be more realistic in your planning.
Below is a publication to help you get started with your spending plan. It has information and worksheets on goal setting, tracking your cash flow and setting up a yearly an annual plan and spending chart.
More information on money and related topics is available at the following website.
Managing Money in Tough Economic Times-A great resource to help consumers during this tough economic time. This resource highlights tips and resources like stretching your food dollar; deciding what bills to pay first; building an emergency fund; and debt management in tough economic times, to name a few.
Next month, we’ll offer more ideas on managing in tough times.