Boosting Your Financial Health in 2017: Part three
Tips to manage your spending plan.
December 21, 2016 - Author: Jinnifer Ortquist, Jinnifer Ortquist, Michigan State University Extension
The previous article in this series highlighted the importance of creating a spending plan. This article will focus on the benefits of managing your spending plan.
Per the 2014 Consumer Financial Literacy Survey, about two in five U.S. adults (39 percent) report that they have a budget and keep close track of their spending. This issue is a challenge for many. Remember, it takes planning and practice to stay on track with your finances. To make the most of your spending plan/budget, do the following:
- Review and adjust your budget weekly.
- At the end of each month, review your progress and plan a budget for the next month (don’t forget to plan for non-monthly/occasional expenses).
- Compare your monthly expenses against your monthly budget. How did you do? If you had extra expenses adjust categories to reflect the change. If you do have a financial emergency, utilize your emergency fund to avoid a cycle of debt, and then replace your emergency fund as soon as you can.
- Budgets are truly a work in progress and must be adjusted from month to month. If you experience a change in employment or assistance income, consider using the Planning for Financial Change form to help you adjust your spending plan for next month.
- For best results, utilize the same budget template for at least one year. This consistency will help you build history and positive results.
Lastly, don’t forget the importance of financial goals in your money management plan. Goals can be short-term (less than six months), medium term (6-12 months) and long-term (a year or more). Use the Financial Goals Tables to get started.
The next article in this series will focus on managing credit and debt.
For additional money management resources visit Michigan State University Extension. Extension’s Money Management program offers financial literacy and homeownership workshops throughout the year to help you become financially healthy. For more information of classes in your area, please visit either the MSU Extension events page or MI Money Health website. Additionally, you can take the Financial Health Survey at MI Money Health to access if you’re financially healthy and discover more ways you can improve your financial health.