NDSU Extension - Sargent County

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Money-wise: Being the Boss of Your Money

Money-wise:  Being the Boss of Your MoneyIn order to reach the goals that require money, it is necessary to take charge of your finances.  The first step in taking charge is to know everything you can about how you are spending your money, as discussed in last week’s news column.

Once you’ve tracked your spending, the next step is to make a plan for how you will spend your money in the future.  In other words, making a plan for how you will use your money going forward; where you will direct it.  Sometimes that is referred to as “budgeting” your money.

There are many ways to set up a budget so that you are the boss of your money; five are described below.

Spending Plan Worksheet: With this worksheet, you will separate your family living expenses into fixed, flexible and occasional expenses. Fixed expenses are expenses that you pay every month and the amount stays the same each month.  They include things such as mortgage/rent and installment credit.  Flexible expenses include those you pay every month but the amount changes. Examples of flexible expenses include groceries, gas, utilities and entertainment. Occasional expenses are those that do not occur every month. It is important to think of what these occasional expenses are so they don’t throw your monthly spending off.

Paycheck Budget: This budget method involves creating a spending plan for each paycheck you receive. You start with documenting how much net income you received on your paycheck.  Then you document the expenses that will be paid from that paycheck. 

Calendar Budget:  Using a calendar, you track your monthly cash flow. Begin by writing down cash on hand or the balance in your checking account on the first day of the month. Then write your paycheck amounts onto the calendar on the appropriate dates. Next, write down when bills need to be paid or when you need to spend money for food, gasoline, school, etc. You list the amount of your income and the bills so you can add and subtract as you progress. Continue this process through the month to see if you can cash flow.

50/30/20 Budget: This “needs and wants” approach is based on designating different percentages of your income for specific expense categories. The idea is to spend 50% of your income on needs such as housing and groceries, 30% on wants such as entertainment, and 20% to go into savings.

Technology: Using technology to help with budgeting also is an option. Many websites and apps are available to choose from, just be sure to only use trusted reliable sources, especially when it involves entering any personal information. Some banks also have their own app that you can use to track expenses by pulling information directly from your account.  It’s worth asking to find out if this would be an option for you.

Each of the first four tools listed above are available online or free from my office.  To request any of them, call my office at 701-724-3355.

Photo Source: https://pixabay.com/illustrations/family-dollar-money-hedged-forward-960451/ (downloaded 2/2/21)

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