Money Management

This unbiased education presents best practices to help people at any stage in their financial lives. Topics include Making Money Decisions, Creating and Managing a Spending Plan, the Importance of Saving and Investing, and Credit/Debt Management.

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Determining Money Values

Your values play a big role in determining the way you spend money. If you don’t understand how your values and emotions influence your money decisions, you’ll never be able to gain control and make better money decisions. Take the money personality assessment to understand your money values.

Steps for Decision Making 

Making financial decisions is a huge process. Decisions to buy big tickets items such as homes or cars should not be taken lightly. Here are a few questions to ask yourself or discuss with your family:

  • What is the money issue or decision you need to make?
  • What are the possible options or choices for making the decision?
  • What are the possible results (pros and cons) for each option or choice?
  • What is your decision? When will you look at the decision again?
  • Additionally, using a decision satellite map may be helpful.

Can You Afford a Home?

When buying a house, it’s important to stick to a price range that meets your needs and will be affordable with your current income. Keeping this price range in mind, you can have confidence during the application process. Consider the following:

  • Overall Cost: If you have good credit, a steady income and a reasonable amount of preexisting debt, it may be safe to estimate that you can afford—and will qualify for a mortgage on—a home that costs 2.5 -3 times your gross annual income (the amount of your paycheck before deductions). You’ll also want to factor in steady income from other sources, such as retirement, disability, child support, social security or alimony. For all income, you must be able to show a history of at least two years, and a likelihood that the income source will continue.

  • Mortgage Payments: Before approving your mortgage loan, a lender will examine two different ratios:
    • Housing ratio = the maximum percentage of a borrower’s gross monthly income that can be used to make the monthly mortgage payment, including principal, interest, taxes and insurance (or PITI). This percentage will be pre-set based on the type of loan that you are applying for, and is typically between 28 and 33 percent.
    • Debt-to-income ratio = the maximum percentage of a borrower’s gross monthly income that can be used for the house payment, plus all other debts. These debts can be from credit cards, vehicles, student loans, etc. The debt-to-income ratio is predetermined based on loan type and ranges from 36 to 41 percent. It’s important to know how much outstanding debt you have before applying for a mortgage. If you find you have a lot of debt, you might need to pay some of it off before applying for a mortgage.
TIP! You don’t have to borrow all of the funds you’re qualified for. Borrow only what you can reasonably afford to repay each month. Your mortgage payment will include PITI.

Communicating About Money

Are you a good listener? The I-Message is a helpful tool for couples and families because it helps you express your feelings in a calm way. For example, if you were discussing paying bills with your spouse, you may say, “I feel nervous when I notice that the phone bill is not paid because I worry about bad information on our credit report.” Additionally, these steps may help you communicate better about money:

  • Find the real problem
  • Talk only about the problem itself
  • Face the problem
  • Brainstorm and talk about options
  • Agree on a plan
  • Support the plan
  • And keep talking!

Setting S.M.A.R.T. Goals

Do you have financial goals that you wish to reach, but it seem like you never do? Maybe you’re not being detailed enough or writing your financial goals down. It’s time to get SMART about your financial goals! SMART is an acronym that stands for Specific, Measurable, Attainable, Realistic and Timely.   

MSU Extension Educator Wanda Roberts explains SMART goals in the video above. Use our SMART goals worksheet and work toward your SMART goals today!

Events

  • Apr 9

    Dollar Works! Money Management Series

    April 9, 2019 - April 30, 2019 Washtenaw County Extension Office MSU Extension office, 705 N. Zeeb Rd., Ann Arbor, MI 48103 Second Floor Classroom

    A basic money management course open to all and free.

  • Apr 18

    Retirement Planning

    April 18, 2019 - May 9, 2019 6 p.m. - 8 p.m.

    This Retirement Planning seminar from MSU Extension will provide you with valuable information about the planning your retirement.

  • Apr 24

    Homebuyer Education - Flint

    April 24, 2019 9:00AM - 2:00PM 9 a.m. - 2 p.m. Flint MSU Extension Office, 605 N Saginaw St., Flint, MI 48502

    This Homeownership seminar from MSU Extension will provide you with valuable information about the homebuying process.

  • Apr 27

    Homebuyer Education - Flint - April 2019

    April 27, 2019 9:00AM - 2:00PM 9 a.m. - 2 p.m. Flint MSU Extension Office, 605 N. Saginaw St., Flint, MI 48502

    This Homeownership seminar from MSU Extension will provide you with valuable information about the homebuying process.

  • May 3

    Homeownership Education (MSHDA) May 3

    May 3, 2019 1:00PM - 5:00PM 1 p.m. - 5 p.m. MSU Extension--Ionia Office 50 East Sprague Road, Ionia, MI 48846

    This homeownership seminar from MSU Extension will provide you with valuable information about the home buying process.

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News

  • People standing in front of a house that has a for sale sign, receiving the keys from the realtor.

    Preparing to buy a house

    Published on March 20, 2019

    Today’s housing market is in recovery, but many Michigan first-time buyers are still struggling.

  • Families standing in front of house.

    How to avoid foreclosure

    Published on March 20, 2019

    Procedures from the Consumer Financial Protection Bureau require servicers to contact delinquent borrowers early with information on options.

  • Coins stacked next to a house shape that was cut from wood

    Five ways to save on housing costs

    Published on March 20, 2019

    By following these five steps, you can lower your housing costs and have more money to spend on other parts of your life.

  • Stay organized to pay bills on time

    Published on March 20, 2019

    Have a system to make bill payments on time.

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