MSU Extension 4-H Adulting 101

Welcome, everyone, to Enjoy Your Holidays on a Budget. We have a wonderful speaker with us today, Jennifer Orquist. She's our Senior Extension Educator with the Financial and Home Ownership Education Work Team. She's also a HUD-certified counselor. So we have lots of great, she's got lots of great information to share. So that way you can make memories, not debt, this holiday season. So she'll talk about spending plans, how to prioritize your needs and wants, and how to set a budget that works for you. So I am going to turn it over to Jennifer. Thank you so much for joining us. We're so excited that you're here. Jennifer, it's all yours. All right. Well, thank you so much, Kathy. I appreciate this collaborative partnership with my 4-H colleagues. So, again, I'm part of a lean but mighty statewide team, and we're super excited to offer a variety of topics virtually. Real quickly, we want to make sure that we share that we are a part of Michigan State University and all of our programs are open to everyone. MSU Extension has been in existence for over 100 years, and we're very, very proud of that legacy. This photo collage does a really nice job of highlighting all the different programmatic areas we offer, and this is just a few of them. If you would like to learn more about Michigan State University Extension, please check out the website on the screen. So what is our mission before we dive in? well, we are definitely motivated to help people to improve their lives through an educational process that applies knowledge to critical issues, needs, and opportunities. And I would be remiss if I didn't put in a quick plug for the work team website that I'm a part of, mymoneyhealth.org. If you enjoy today's topic, we offer a variety of other free one-hour webinars. So I would highly encourage you to check us out again if you would like some more information down the road. So let's talk a little bit about our objectives. I know this looks daunting, but we will end on time, I promise. But we're going to talk about holiday budgeting, all things holiday budgeting. We're going to talk about some helpful tools, such as creating a list. But I also want to try to ensure that you're successful with whatever financial goals you have in regards to holiday shopping. So we're going to talk about how a smart goal framework can really help you be successful. Then I'm going to do a little bit of a segue. As Kathy promised, I'm going to talk about some other tools that are really helpful in regards to all things money management. Tracking our spending, utilizing a spending plan, and if we are committed to that spending plan, making sure we're aware of some potential pitfalls that we can hopefully avoid. And then we're going to kind of segue back to this holiday notion of being prepared and having fun and enjoying the holiday without necessarily adding to an existing debt load. So we're going to talk about being creative and possibly compromising, and then also take into consideration some additional resources. So let's go ahead and dive in. I will be periodically checking that chat pod, and if I miss anything, Kathy will let me know for sure. So again, those of you who have just joined us, welcome. We're excited that you're here. So I always like to start my sessions by setting the stage. I'm a firm believer that we're all in this together, and so I think sometimes data can help us understand that. So per the FINRA Investor Education Foundation, which does roughly a biannual survey, for people like me who love data, they break out national data and state data and then do a comparison. So what they discovered in 2024 was that 49% reported that they did not have an emergency fund that was equal to money set aside to cover three months of expenses. So this is in regards to Michiganders compared to the nation at large. So why am I starting with a fact such as this? Well, I think it's important to stress that saving is a challenge. And even if we're saving for something special, such as holiday spending or paying down debt or taking a family vacation. So when we talk about saving can be a struggle for many. We also can look at how the national economic climate can contribute to that. There's a lot of uncertainty. Cost of goods and services are increasing. So what I really want to stress today is in regards to talking about the fun topic about celebrating the holiday, I also want to stress that some of those tools that we'll be talking about can also help lend some success in regards to all things personal finance, even after the holidays. So real quickly, before we begin, we would like to take just a moment and talk about and honor different financial practices across cultures. We want to make sure that we're sensitive and acknowledge that for some individuals, earning or paying interest is actually prohibited. We also want to stress, too, that when we look at monthly expenses and obligations for some individuals regarding their culture or belief systems, tithing or living generously is an equalized priority, such as rent or groceries. And that means maybe giving certain money to either a faith-based entity or a social or civic entity that they're passionate about. And lastly, we want to also honor remittances, where again, a portion of earned income is going towards family of origin, regardless if they're living abroad or within the U.S. So we just want to take a moment and pause and honor those differences in cultural practices in regards to money management. So let's begin. Let's dive in. First poll question, and we're going to utilize the chat pod because I have found that sometimes the chat can generate some fun discussions. So I have a quick question for you. Have you started a holiday shopping list? Yes or no? There's no harm, no shame, but it's just kind of fun to get an idea if anyone has actually dipped their toes into planning. Oh wow, Brenda, kudos to you. Mine's been sort of a mental list, but I haven't actually put it on paper yet. Kathy hasn't either. Okay, all right. So for many of us, we haven't started yet. But what I'm excited about is you're here today, so I think at least is on many of our radar. So let's talk more about this. So the whole notion, oh it's small, okay I gotcha. Well mine might be scaled back too a little bit because I'm telling you the price of groceries is competing with some of my my holiday budget. So let's talk about setting a holiday list and checking it twice. So a holiday list can be helpful because it can start to help us map out what those potential expenses are going to look like. So first and foremost, whom may we want to shop for? Starting a list of all those individuals and then maybe starting to sketch out or scratch a draft of what we may hope to buy for that person. What would be equally helpful is to start to identify a potential price point. So maybe you want to buy three items for a certain family member. Possibly you know what those items are and then start to identify a potential price point. Once we have started to kind of create that grid, and I'm going to show you an easy example I have created that could be certainly reproduced, which would work best for you. But once we start to kind of formalize and tighten that list, then we start to come up with a total. How much are we going to spend for celebrating the holidays? Also, too, in that list, we may also include other things such as travel. Are we going to stay overnight? Are we going to have fuel or gas related expenses? Are we also maybe hosting a meal and what that might look like? So I think when it comes to planning for the holidays, it's not necessarily just a shopping list for gift exchanges, but also two sort of additional expenses for the holiday altogether. One of the things, too, to start to ask ourselves as we're developing this list is where will the money come from to pay for these expenses or pay for these items? Have you been disciplined and diligent and did you start a Christmas savings club with your financial institution in January of this year? And if yes, kudos to you. Maybe some of you have some gift cards set aside for holiday shopping. Maybe you've been saving a certain amount each week or each month from your paycheck. What are some other ways that people may be setting aside money throughout the year to save for holiday shopping? And I'd love to hear from you in the chat pod if you have some thoughts. I can tell you that doing this over the years some people have shared that maybe all pop bottle returns throughout the year are set aside to pay for holiday gift exchange again maybe some side jobs or gig jobs or one-time events such as garage sales charity yep yep absolutely yes yep I know here in Kent County we're fortunate to have a lot of entities where you can sell used or gently gently used items new or gently used consignment shops used cd bookstores those types of things. So understanding where the funds are going to come from to fund those expenses are important. Yes, absolutely. Yep, yep. And even seasonal help, right? I've known some individuals who will work an extra job during the holiday season so they don't have to put those expenses on an existing credit card. Certainly credit cards are an option and we're going to talk a little bit more about some of the pros and cons in regards to adding to an existing debt loan. But I think as Kathy mentioned sort of in the beginning, and she teed this up really well, if we don't want to utilize credit, what strategies do we have since Christmas is roughly two months away? So we're going to talk a little bit more about that. But notice that last bullet. Can you afford what is on your list? And that might mean different things to different people. Now some people may say I've got room on my credit card so I can add more debt to that. That's a choice. Others may say I only want to use cash. I don't want to use credit but maybe what you have on hand in regards to cash isn't enough to cover on that list. So is the opportunity to possibly make some concessions or compromises. Maybe committing to only buy things if they're on sale or if you can find an electronic or in-store coupon. Maybe taking the time to commit to doing some comparison shopping. If you're really going to try to stick to that list, can you start to utilize, for example, Black Friday specials to try to buy those items at an even more reduced amount? And as again, I mentioned other expenses around the holiday. So what I would like to really think about and really encourage those of us today who are eager to start thinking about holiday spending is how can we be creative and spend less? And also, too, constantly reminding ourselves, do we want to add to an existing debt load? Because I would say that the holiday planning, it's not a bad idea to kind of fast forward and think about January. Where do you want to land after the holiday and what do you want your finances to look like? Do you want to start that new year feeling fresh, like, wow, I didn't add to my debt load? Or are you trying to avoid possibly going into that new year feeling a little bit overwhelmed or cash strapped. So some things to consider as we discuss more of this today. So I realize this is a bit small and I tried to make it as big as I can but this is just sort of an informal potential idea when you're starting to sit down with paper and pencil to draft that list I was talking about. So let's quickly walk through this and then we'll explore some of those other concepts. Notice on the left hand side who's the list of individuals that we want to buy for. The next column, what are some of the items or different things we hope to possibly buy? And then that third column, starting to give an approximation of cost. Notice once you've exhausted that, it's a good idea to total that. And now let's look at the next column. What's the total amount you plan to spend this year on each person? Because sometimes that can be an eye opener. You might be writing the list and being excited, but then maybe you think it's important to spend the same amount per person. I know for some people that's true. Or maybe you didn't realize how much you were going to spend on one person. It just gives you that idea to make sure that you feel good about those potential purchases you're hoping to make. Notice the next column. Where will the money come from to pay for this and can I afford it? Now for some of the gifts, you may have that Christmas club money set aside. If you do, kudos to you. Maybe you've got some cash on hand. And for other individuals, maybe you're going to have to use a credit card. So what I did in this example, I just put a fictitious example. This person had some money set aside, they had some Christmas club funds, and they had some cash on hand. So they only had $155 available, but their total costs so far were $245. So this person didn't want to spend any money on credit. So on that far right column, the last column, what else could I do that would be less expensive? And this is where you can be creative and make some compromises. Can you decide to buy less gifts per person? Can you look for better deals, etc. And then in this particular scenario, which is fictitious, by the way, they were able to whittle down that list a little bit so that they were spending no more than the cash on hand that they had because this person didn't want to add any more money to a download. So I would love to hear from you in the chat pod before we continue on. When you have done Christmas lists in the past, did it look similar to this or different? Any thoughts on this? Because this sort of takes that planning to a little bit higher level, but I'm curious if you've done something like this or seen something like this or if it's different. So thank you, Allison, a little bit different. Anyone else? Have you seen or utilize something similar or is this different okay not so okay so just kind of a mental list okay okay all right do you think that this type of list gives you the opportunity to map out your spending at a different level is that is that a possible opportunity with something such as this any thoughts on there yeah yeah allison you think so i think what it can do oh you have oh awesome well thank you susan i appreciate that too and that's exciting to me too that there are many of options out there like this okay but i keep a total number in my head okay good always good right i think for for some folks it provides more of a framework right i do know that some people sincerely struggle with, um, impulse shopping, right? I hear you, I hear you, Gabriel. That's funny. Oh my goodness. So again, this may or may not fit for all situations, but I think the takeaway is it allows us to strategize and plan. Okay. All right. You have done something similar. Awesome. Great. Well, perfect. Well, thank you for sharing. So I think it allows for some opportunity right it allows for some strategizing maybe a little bit more pre-planning I think it also allows us to really sort of own before we actually go to a store and make a purchase we can own for ourselves what are we committing to spending right and and knowing where that spending is going to come from so there's no sticker shock or surprises at the end of the month with that credit card statement but I also think too if a person was struggling with either impulse shopping or maybe even, and I can own this for myself, going to the mall, not having a great list and feeling overwhelmed and then leaving the mall after numerous hours with not very many purchases and knowing you still have to go back out again. So I think there's an element for strategizing too. So again, the takeaway, certainly you don't have to use something exactly like this, but for those of you who are doing this already, that's exciting to me and those of you who haven't tried it it may it may enhance that planning experience so that you can be successful in achieve your goals so oh did someone add something I thought I heard I've never seen anything like that so I think it's really helpful because I'm usually like calling my niece you know the day of at the store so what is such and such want what size do they wear like if I would have thought about it and had it all planned out you obviously I don't plan anything out I just go and do I mean and that's hard too right because sometimes you could take the time to have well thought out purchases and then you miss the mark on everything right so there there is some value to asking people for what they want um I did want to kind of um illuminate um and I want to make sure I say your name correctly is it Iowana I hope I said that right I really like what you said too because there's some truth to that they go on to share I usually buy gift card shopping is too overwhelming and and there's some merit to that right it takes planning it takes going out using free time and sometimes depending upon who you're buying for they may want to buy their own thing so I wanted to give you props for that another comment I have a few of the same ones to buy for each year but all year long oh okay yes my mom does that too so throughout the year when you find good things you buy them and set them aside big box labeled Christmas gifts good for you Brenda so you're you're planning the whole year through and saving money along the way and then Colin I might do the table just like the screen just to get the experience and that's that's fair you know what I think truly it comes down to whatever it works for us but I'm a firm believer in at least exploring and seeing how it might work out. So I'm excited that you're sharing that. I hope that it's helpful. So I promised we would talk about goal setting. And let's jump back to this real quickly before we do that. Let's say you map out your list and you pretty much firm up who you're going to buy for. You have a pretty good idea what you're going to spend. And you've looked at, okay, how much am I going to have to save in the next two months, right? Because we technically have about two months and I think two days before Christmas proper. So are you going to try to save money in the next two months so you can be debt free and not have to put it on a credit card or will it be a combination? Regardless of what you decide if is it going to be credit cash or just credit or just cash at least you have an idea that you have two months to plan. Okay okay no worries no worries not a problem. so let's say a person decided they didn't want to add to an existing debt load or they didn't want to put it on credit they wanted to save so we've got two months right so let's try to make the most of these next two months and we could potentially be more successful if we think about that end goal with a smart goal framework smart goal stands for goals that have a financial element that are specific measurable attainable realistic and time bound and what this is trying to really illuminate is that many of us have goals, but if we don't really make them firm and tight with some boundaries and limits, it's often really hard to be successful. Some examples here. I should save some money for my holiday shopping. Now that's a goal, but that's a pretty loose goal, right? Or notice the bottom one. In a few months, maybe by the end of the year, I'll give it a shot. Nothing is specific in regards to that goal. So here is an example of a SMART goal for someone who wants to possibly save for holiday spending in the next two months, but they don't want to purchase anything on credit. So they have to save cash. So they sat and they did their list. They came up with a total of $400. So that means, hey, I've got two months. I have to save $200 for the next two months. They have looked at their budget and expenses. they have decided that it's realistic and attainable. And so that means by December 22nd or December 23rd, whichever day is today, they're going to have $400 set aside so that they can go shopping up until Christmas Eve and hit some of those last minute deals. So let's talk about real world USA. This is a great goal. This is a smart goal. And right now this seems doable for them. What happens if they realize after month one they can't save $200 a month for two months? What might be some other ways they could try to generate some saving or free up some money in their budget to put towards their shopping? Real quickly in the chat pod, rapid fire, don't overthink it. So they've tried this month one, let's say they only saved $100. They're not going to meet that $400 mark. What could they start doing immediately to try to free up some money in their budget to set aside for their holiday shopping? Any idea? I gave a hint earlier, but I'm not going to. Okay, there you go. There you go. Start to make some choices. Maybe cut back. Yes, absolutely. Yes. So maybe some of those day-to-day choices, maybe start to make some concessions, right? Bring lunch or snacks or coffee. What about that pop bottle return? What if we decided any remaining weeks until the holiday, that's going to go towards that, right? What about other things they might consider trying? Any other ideas? I'm making you work way too hard on a Thursday afternoon, right? Okay, that's great, Allison. Possibly maybe get a quick part-time gig job or a retail job, even for a month or a month and a half. Absolutely, that's an opportunity. If it works for someone's schedule. Yep, secondhand place to sell stuff online. Absolutely. And I always say to people when you sell stuff online, And be careful if you're going to meet someone, the buddy system, public place, always read the fine print. Be careful, be safe, but absolutely. But I'm going to take it one step further. Many times when we go grocery shopping, we don't have a list and we don't stick to the list, right? Sometimes we don't even bring a set amount of money so we don't overspend. So another strategy could be is to not only bring a list and maybe a set amount of funds to spend when we go grocery shopping, but check your pantry beforehand so you're not buying things you already have and if you have the opportunity to use coupons from here on out not only for holiday purchasing but groceries maybe be a little bit more intentional about that and that might free up some money too so we have some great ideas see we were creative and I think the reason why I posed that situation I love coupons too I love coupons too because I really want to stress here that once we set a SMART goal, it doesn't mean that everything's going to go perfect. And that's okay. The most important thing is to check in with ourselves each month and see how we're doing. Because sometimes SMART goals look doable in the beginning, but then we realize, gosh, you know what? Either we miscalculated or some new expenses came up and we have to pivot or compromise. And the best two ways to do that with any goal, regardless of the time frame, whether it's two months or two years, constantly reevaluate how much do I need to save and what is my time horizon or how long do I have to save and if it's a struggle to save the amount you thought you could per month where can you be creative or make concessions and that's just what we did today so excellent excellent so I did promise and Kathy shared I would talk about different tools to help us manage our money so again that's not just for this holiday budgeting but this could be indefinitely But let's talk about the holiday budgeting example thus far. So you came up with your list. You have an amount you want to potentially save for the next two months. What are some things that can help you stay on point and be successful? First and foremost, can't say enough about this activity. It's a 30-day activity. You track everything you spend for 30 days. At the end of 30 days, you add up everything you've spent. Now, granted, around this time of year, oftentimes we spend more money. So I'm going to put that caveat right out there. But what's so great about this is what this does is it helps us learn quickly, on average, what our spending behavior looks like. But then we can take it one step further. We can start to look at trends or themes, and we can start to realize where might I be spending money on things I don't really honor or value and that are taking away my momentum towards my goals. We can also categorize our spending in that 30-day window and really zoom in on or scrutinize. Are my choices more for needs or wants, which can sometimes be a tough discussion? Real quickly in the chat pod, what's the difference between a need or want? What's the difference? Any thoughts? Because sometimes we struggle with them, let's be honest. When I'm starving at the grocery store, everything looks like a need, right? which may not necessarily be true what's the difference between a need and a want any thoughts yes yes perfect colin thank you needs are things for our survival shelter food clothing warmth all those things yep yep and then the wands are kind of the icing on the cake but like i said It's sometimes easy to justify a purchase if we're, you know, like I said, really hungry. One example I will often give is, you know, just because we're hungry doesn't mean we should have, you know, a steak. Not necessarily, right? So, again, a need is something that is necessary to live. Well said. Wants are something that aren't necessary, but it looks interesting and catches our eye. Ooh, I love that. That's very well said. So, thank you. Yes, we have identified that. We know the difference. So let's talk about how we can track our spending. Now, what I wanted to say is that I do have some handouts that can complement today's session. And I would be happy to work with Kathy to make sure those are sent to those of you who have attended today. So we'll make sure that that happens. And Kathy, any way I can help to do that, let me know. But there are some templates that I wanted to share. One was the shopping list. But two, from the University of Minnesota, their Dollar works to curriculum, they do have a nice tracking spending handout. Okay, what's nice about it is all you have to do is fill in the information. Other people who have shared with me that they track their spending on an ongoing basis, you can use a spiral round notebook. It doesn't have to be sophisticated. Just a piece of paper is fine. The whole idea here though is to track all spending for 30 days and then add up what you've spent. Personally, I like to save my receipts. I'm a visual learner. I like to look at those receipts and then separate them by category to give myself that snapshot on what did I spend in that 30-day window. And then don't forget, add up your total. Now quickly, a checkbook is also a great way to track spending, but does anyone know what a checkbook would miss? So let's say we have a 30-day window. We've been shopping. We look at our check register and add up everything in that 30-day window. What might that checkbook register miss? in our spending? Any idea? Because it can be a tool, it can be helpful, but it does miss something that we would want to make sure we're aware of. I'll give you a hint. What if you were to spend money from somewhere that didn't, what if you were to spend money that didn't come from your checking account? So let's say you withdrew some money from a savings account, right? Or maybe you did a side job and you were paid in cash. Your checkbook register wouldn't capture that. So if you really want to give, yes, absolutely, we'll make sure. Yep, yep, absolutely. If you really want to make sure that you're doing this activity to its fullest and learning the most from it, you want to make sure that whatever method of spending you're using in that 30-day window, it's captured in your collection. So we do not endorse products or services, but with that being said, I wanted to let you know if you're a techie person or if you want to have something sort of an electronic way to track spending, it is available. Different platforms such as creditkarma.com, smartphone apps, nerd wallet, certainly Google Docs are different things to consider. Always read the fine print. Some apps do come with fees. I would even go on to say to protect your information because some platforms actually want to sync with your bank account and you have to be comfortable to do that. You want to make sure you know how they're protecting your personal information there is quite an array of data breaches as of late so again choosing to utilize an app would be personal preference one quick shout out though for powerpay.org powerpay.org was developed by utah state university extension which was one of our national counterparts and that platform is really wonderful particularly if you have debt and you're seeking some debt repayment strategies you do have to create a login and password it is going to ask you to enter in some information about your existing debt you know how much do you owe what's the interest rate etc but that can be a great way to provide some suggestions on paying down debt so that one definitely um i can speak to so again tracking spending gives us information about our spending behavior on average and also lets us know where our money is going so that if we do want to do a spending plan we've already done some of the leg work of learning our behaviors prior. So now we're going to sort of segue into an example of why tracking your spending is so important. So when I do this session in person, I have a fun little money slider that gets quite a amount of good reactions. So doing it virtually is not as exciting, but I think we're going to walk away with some good information. So if you decided to buy a specialty coffee or energy drink, and it's $5 at a pop, and you do this $5 a week, you've spent $25. But what if you do this every day for five days a week for a whole month? You've spent $100. And if this is a regular behavior, let's say during the work week, at the end of the year, you've spent $1,200. Fast forward to 10 years, $12,000. So we're not picking on these behaviors, but what we do want to understand and make sure we remember is that small purchases over time can become big money and many of you entered in the chat pod earlier that if we cut back on things like a coffee purchase or eating out we can free up some money in our budget for some of those other things that are equally important so if you're so inclined if you want to answer in the chat pod a b c d or multiple which way of tracking do you think you might try after our conversation about tracking spending there's no one right or wrong answer many of you are thinking a little notebook. And again, I have to tell you, over the years I've had people show me, they track everything because they want to know where their money's going on a regular basis. I've had some people say they might do the notebook and saving the receipts. So again, personal preference, but I'm just excited that maybe you're considered about giving it a try because it's really a helpful activity. So let's quickly segue into a spending plan. Have to talk about how important a spending plan is. It truly is a basic foundational tool for any financial goal. But beyond that, it can truly increase our feelings of control over our personal finances. And it does that because every month, not just a one and done, every month, we are intentionally looking at a detailed income and expenses that occurs in our household. So what money is coming in and what money is going out every month. And the reason why it's so critical to do this every month is you can't do it once and expect it to work because it really is a living document. Every month there should be something different in your budget, even if your income stays the same. Over the years, I've had some people say to me, well, you know, Jennifer, I'm hourly, my income varies, a budget won't work for me. And I can understand and appreciate the frustration when income is sporadic but in all honesty regardless of how we're paid or how off how much we earn on a regular basis spending plan can be critically helpful. It can also help us understand patterns where our money is going. Are we honoring our values and goals with our day-to-day financial decisions and once we have goals such as saving for that holiday budget in two months you can start to incorporate those goals in your plan. I can tell you personally as a younger adult when I started treating my savings goals as equally as important as my bills, I was amazed at how much easier and faster I was able to save because I didn't compromise. I made sure that they were equally important. Now, that doesn't mean every month I could save the same amount, but I was diligent and determined to try to save something every month, even if it's just loose change. So again, can't say enough about a spending plan. Also know there's a wonderful national slogan that says pay yourself first and really this is stressing the importance about savings because remember that statistic we looked at in the very beginning of our time together savings is not easy and sometimes it's even sort of a thought process shift you know savings is often an afterthought but maybe start thinking about it as equally as important as paying a bill so again are you currently using a spending plan we talked about that if you're not this is an opportunity to think about it. So this is small. This is one of the resources I'm going to send. There are some other templates I'm going to include as well. But what I wanted to quickly just stress here is to do a quick walkthrough about a spending plan. Oftentimes what I have found is people have tried one, they got frustrated, it didn't work, and they didn't want to try it again. So I want to quickly try to build some confidence with spending plans before we talk about some of those other tools and we're doing great on time so we'll keep going. So first and foremost full disclosure there is no one size fits all when it comes to spending plan templates. You can use whatever you want. I'm very transparent. I use a legal pad. I don't even use an app. I don't even use this form. Use what works for you but I can tell you a nugget of a tip from research. It is recommended that you do stick with whatever you decide for at least a year. You don't want to switch it up from month to month. You want to use the same template so you can start to really measure your success and feel good about that. So upper left-hand corner, all sources of income. That could be from disability, that could be from social security, that could be from an income or wage earner situation. All income coming into the household goes on the upper left-hand corner, and then you total it up. Even if it's assistance, because assistance is often earmarked for certain purchases. But again, that's still income coming into the household. Notice then below that is your housing related expenses. You could be a renter, you could be a homeowner, it doesn't matter. But you're going to list whatever your housing related expenses are in that section and then add it up, get your total. Jump down below that utilities. Now again, this can vary per person and per situation. Some renters are fortunate to have their water and maybe trash removal incorporated into a rep payment. Other individuals, it's all broken out. Again, per the month, list what you have and add up the total. Now let's jump over real quickly to household flexible income. I'm sorry, household flexible expenses. So flexible expenses are those expenses that you and I have that can differ from month to month. They're not static. They're not rigid. An example I can give is maybe one month I go to the grocery store and shampoo's on sale. So I might stock up and buy a couple extra. And then the next month, I don't need it. So I'm not going to make that purchase in that month. Also, too, some other examples you can see under that category. Maybe in some months you have prescription co-pays and other months you don't. So there's a flexibility to the occurrence of some of those expenses. So you're going to list what you have in a month time frame. and then again add up your total. Now I want to talk a little bit about fixed expenses. Now fixed expenses on this particular template are a little bit spread throughout, right? So you may have a rent payment or a monthly mortgage payment. Those would be considered fixed expenses, but notice they're under the housing category. Also too with utilities, some people will enroll in a utility payment program so that their monthly bills are more consistent. So theoretically, someone may say that that's a fixed expense. However, don't forget that if you use more than what was predicted throughout that year, at the end of the year, you may have a larger bill to make up for a difference that maybe you hadn't paid throughout the year. So quickly, a quick definition, fixed expenses stay the same from month to month and flexible expenses can vary in the amount and frequency. So now we're going to dip down to debt and you're going to notice on the left hand side it says secured debts and on the right hand side it says unsecured debts. So let's talk about the secured debt column first. So under that header you'll notice an auto loan or maybe an auto lease. You might notice student loan or even taxes. I would even say a mortgage loan would be considered a secured debt. Secured debts are debts that you and I may have where if we default or if we no longer make those payments that we agreed to, something can be taken from us. So again, in the example of an auto loan, if we default on that loan, they can take the car. The mortgage loan, if we don't pay those payments, they can take the home. why you might ask are they breaking out secured and unsecured debts well before I answer that that important question let's quickly look at unsecured debts and let's talk about what those include notice on the right where it says unsecured debt you see credit card debts and personal loan debt so unsecured debts are debts again that you and I may pursue but if we default on those they can't take physical property from us, okay? So why is it broken out on this template? Great question. What I think is important to understand is that an ideal scenario is we pay our bills on time. When we pay our bills on time, our creditors and lenders and people we have financial obligations or relationship with are happy with us and they can afford us, in many cases, positive credit reports and positive credit scores. But let's be honest, sometimes life happens and sometimes we aren't able to pay all of our bills on time. If we choose to not pay bills on time, there can be consequences. Any idea? Oh, did someone have a question for me? No, no. Okay. So real quickly in the chat pod, what are some consequences if we don't pay our bills on time? Because that is sometimes a reality for some of us. We may have lost our job or maybe our hours were cut back. Yes. Yes, Kyle, there can be fees. What else? What else can happen? Yes. Eviction. Yep. Credit issues. 100%. Right. If we make a late payment to someone who reports that behavior to the credit bureau, we can pull our score down. What else? There's a couple I haven't seen yet. What else can happen? Interest rate increases. Yes. If I miss my credit card payment, I miss it. If I pay it late two months in a row, they can impose what is called a penalty APR, as high as 39%, and that can last for six months. Yes, shut off. Yes, evictions shut off 100%. So going beyond those things, legal action, potentially, right? Maybe our debt is sent over to collections, right? Or maybe there could be some legal implications, 100%, right? So when we pay bills late, and if that impacts our credit report and credit score, that can also impact other goals we may have, such as running an apartment, establishing utilities in our name, applying for a job, and getting a job. So we can quickly see here that money management and day-to-day decisions can impact long-term goals, right? Short, medium, and long-term goals. But back to this template and why debt is broken out. As I said, ideal scenario, we try to pay bills on time. There are sometimes situations where people or families experience where they can't, right? And so the reason why in this template it breaks out those two types of debt is if we had to make a tough decision on who we paid on time, a potential recommendation or consideration would be to pay our secured debts on time so that nothing is taken from us that provides family security such as housing and transportation. For example, taking little ones to school or going to our job, our place of employment. Now, that doesn't mean that if we pay our credit card bills late, there can't be consequences. There can be late fees, there can be penalty APRs, etc. But I think what's important to understand is the reason why they're broken out here is if we were in that situation where we had to make tough choices, it's trying to help us weigh those pros and cons and understand that there can be a strategy. What isn't listed under secured debts, but oftentimes might be another category to consider adding under that, would be a rental payment because of the eviction option, right? But again, every situation is different and every person has to weigh those pros and cons. But I wanted to also share some unique aspects to this template that are not on all budget templates. Notice on the left hand side the lower lower left where it says financial summary this is where we're going to bring all those totals from all those different categories. We're going to have our income and all of our expenses and then we're going to figure out where we land. We're either going to break even we're going to have money left over or we're going to be in the negative. Now hopefully there's money left over or at least we broke even but what I always caution folks is when you break even, chances are there's an opportunity that next month you may actually be in the negative if your expenses are higher next month than they were the month that we're in. But the financial summaries where you do the snapshot for the month, how did I land? Break even, money left over, or am I in the negative? But last thing I want to quickly stress before we move on, on this particular template in the lower right hand corner, look where it talks about assets and this is sort of a unique component to this template. Notice it says what is your current balance in savings checking? Do you have any retirement investments such as a 401k? Do you have a vehicle that's paid in full? What's the approximate value? You can find that on platforms such as Kelley Blue Book and do you have any real estate that's in your name that's paid in full. You might say, well gosh, why is it asking for all this information? Great question. It's an opportunity for you to kind of catalog some information to give yourself a snapshot of what your asset situation looks like. That means money or belongings that have value, a snapshot of where that stands at that moment in time. To take this one step further, many people will do what is called a net worth statement once a year. You get a plain old piece of paper, you draw a big T in the left-hand side, you put liabilities. The right-hand side, you put assets, you list everything, and then you come up with your totals. Now, liabilities are debt obligations, things that you owe money to. For example, if you have a credit card debt, you're going to list the total balance of the credit card debt, not just the minimum monthly statement. Why that net worth statement or even taking the time to do a snapshot of, for example, assets on this particular template is, it allows ourselves to check in with how are our finances doing on an annual basis. Some people aren't going to be committed to doing a spending plan. Some people don't love balancing their checkbook, unfortunately, or looking at their financial statements from their financial institution. But if nothing else, if you do a net worth statement, at least annually, you can quickly see, how am I moving? In what direction am I going? Are my liabilities going down or are they going up? And are my assets going up or going down, right? So we're talking here about a lot of different tools that can help us stay on track. Certainly a monthly spending plan can be super helpful because what we're saying is we know we're going to spend money. We might as well attach a plan to that. And remember, as I talked about earlier, you can add your goals in here. If you're saving for a down payment for a home, but you're also saving to pay off debt, you can write these in your monthly spending plan as prioritized commitments. So that's a little bit about this template. You can search on any online search engine. You can go to our website for more templates. There are a variety available but I wanted to at least quickly walk through to help you understand how a spending plan can in fact be helpful. So real quickly I wanted to give a shout out for our online self-paced money management series which is about a six-hour commitment. The fee is $50, but we do offer scholarships based on household income. And this particular slide comes from that platform. It's a very deep dive, all things personal finance. So if you would like to learn more information, it does generate a certificate of completion. But why I include this slide is I wanted to quickly show you some rough ballpark estimates of approximations of different categories that may be included in a monthly spending plan. and why I wanted to zoom in on item number three, housing. Housing is something that's been a national issue even prior to the pandemic. Affordable housing is a challenge and it's an ongoing issue for many. So the rule of thumb is our monthly housing payment should not exceed 25 to 35 percent of our gross monthly income. HUD actually recommends 30, but 25 to 35 is sort of a spread. But notice in red that many individuals are spending 40 to 50 percent of what they earn each month on housing because that's all that's available to them. So if we're spending that much on housing, that means there's a lot less to go around and all those other important categories we can see here on the slide. So again, when we're looking at whether or not we should use a spending plan, if we truly want to make the most of all those financial options or choices we have with limited resources, particularly if we have heavy hitters such as housing expenses and debt, don't minimize the benefit of how a spending plan might be a helpful resource. So real quickly, if you are using a spending plan, kudos to you. Or if you're considering it, there is sort of a quick formula to help us gauge how are we doing. So this comes from not only our website, but it's also noted in the personal finance text that was written by Garmin and Forge. So the formula is this. Our net monthly income, that's our take-home pay, should equal what we spend on fixed expenses, what we spend on flexible spending or flexible expenses, and hopefully a smidge towards savings. That should equal our monthly take-home pay. But what if that's not true? Well, we have options. On the left-hand side, can you increase your income? Are you eligible for overtime? Can you do a part-time job on the side periodically? Or can you decrease your spending? We've talked about tracking or spending. You listed a litany of creative ways to decrease spending. That's an option too. Or last but not least, might you consider a combination of both, trying to increase income and decrease spending at the same time? So again, those are some different strategies to help us try to make that formula true so that our spending plan is successful. Real quickly, I also wanted to share one last tool before we segue back to our holiday spending budget. The use of a calendar, I can't say enough about it. A calendar is a wonderful tool that can help us record our bills, when they're due, how much we owe, but also a system to make sure we visibly know we've paid them on time. Real quickly, in my household, I have a big, big calendar on the refrigerator, when a bill hits the house, I immediately record it in a red ink pen. And when I pay it, I highlight it in yellow. So every day when I walk by that, I can make sure that bills have been paid on time. We talked about tracking spending. You can also track your spending on a calendar. Dollar Works 2, again from the University of Minnesota, also suggests that you may want to track your income. One strategy to try to help us get through the month is to try to better balance our spending and our income. Now, that may not work every month, but it's something to think about. Another benefit of a monthly calendar is you could list your future expenses. And I can tell you that something I've started doing at the beginning of every year, I go in and I write all the fixed expenses for the year. So every time I turn up the calendar for the new month, my fixed expenses are already there. Also too, and we'll talk a little bit more about them in a minute, but non-monthly expenses can also be listed on a calendar. And non-monthly expenses are those things that you and I know we're going to have to pay for, but we don't always get a bill in the mail for them. And if we do, it's sporadic. Examples of that could be a water bill. I get a water bill once a quarter. Another example might be an auto insurance premium. Some people get one a year or two a year. So even though it is technically a bill, sometimes it's a large expense because it covers a large timeframe. frame. So sometimes those non-monthly expenses are a great way to be predicted on a calendar. So real quickly, I promised we would also talk about spending plan pitfalls. And I can tell you that we take a deeper dive on these topics in our Make a Spending Plan Work for You webinar. But real quickly, what often derails people's efforts of being successful with a spending plan are the following. One, they're not saving. And DollarWorks 2 does a really good job of explaining different types of things to think about saving for. An emergency fund for small unplanned expenses, an emergency income fund for unplanned loss of income. And that's exactly what that first slide was talking about, that data set. I can tell you that twice in my career, I've lost my position, not because of my performance, but because funding for the position was eliminated. So when our income stops, bills still keep coming. So Dollar Works 2 suggests get a small pot of money set aside for small unplanned expenses, whatever you decide the amount is. Once that's in place, then start intentionally saving for unplanned loss of income. Three to six months is a good recommendation. Once those are in place, then start saving for your goal savings because that way you've created a financial framework for the unexpected. Non-monthly expenses are the other thing that is a pitfall or derails our efforts for being successful with the spending plan. And these are those expenses that are going to pop up that we often forget about. Holidays or gift giving or birthdays if we celebrate those things. A license plate renewal. I mentioned auto insurance premiums or even car maintenance or home repairs. Maybe the school year when our little ones have growth spurts or need more school supplies or are involved in extracurricular activities. And if we have pets, annual exams, grooming, etc. Those are things that often if we're not planning for them ahead of time, once they pop up, can really derail our efforts with our budget. So what are some ways that we could decrease our spending to increase savings for holiday shopping? Well, we talked about a lot already this evening, but I would encourage you to continue to think about that for you yourself. What I want to stress too, again, with your list, remember your timeline. If you're going to utilize that SMART goal, make sure it's realistic. You don't want to set yourself up for discouragement or failure. When you come up with your list and add up everything that you're hoping to spend, are you comfortable with that amount? Or is your budget too high for your income? Are you going to intentionally decide to use credit? And if so, are you already adding to a high credit card balance or debt load? And are you okay with that? And might that impact future goals you may have? And if so, does that need to be re-evaluated? And last but not least, do you even have just a small emergency fund right now? And if you don't, might that be something to think about as you are confirming your holiday list? So what are some ways to be creative and safe? Can you make an adjustment to your list? Can you decide to maybe do something different this year? Maybe make some gifts on top of gift giving. I know some families have just moved to totally homemade gifts for a year or they might rotate that. Can you give coupons of your time in addition to gifts? Can you suggest drawing names with a set amount to spend per person instead of having to buy multiple gifts for multiple people? That's often very popular, particularly with large families. I can tell you that my mother's family did that for many years because there were numerous aunts and uncles and nieces and nephews. It got super expensive. So we had fun drawing names with a set amount per gift. Also to suggest a fun gift-giving game. This was very popular on my husband's side of the family, where again, we would draw names, set limit, and it was more of a silly gift exchange. You would often see repurposed gifts from year to year or just fun, silly gifts that may be found at garage sales or thrift stores. And other ideas. I've heard other folks say that instead of gift giving, maybe they just host a meal and everyone brings a different dish to pass, etc. so the opportunities are endless but in closing being creative and compromising and helping explore other ways of celebrating the holiday allow you to still have fun but not necessarily break the bank so with that I want to thank you so much I want to turn it back over to Kathy she has some closing announcements but thank you for your participation and I hope this evening was helpful. Wow. What, what great tips, uh, lots of, uh, tools that we will be sending to all participants. So don't worry. Um, you'll get something in an email from myself with all these great tools that Jennifer talked about. So thank you so much, Jennifer, for sharing all your knowledge and expertise, and hopefully, um, you can utilize these. Um, and we have one more Adulting 101 for the year coming up, and that will be on November 13th. And that topic is going to be navigating tough talks. The holidays can, not just the holidays, but the end of the year can cause conflicts. Anytime you can encounter conflicts, but this is a program where it will teach you different ways to manage those disagreements with respect and open-mindedness. So that'll be November 13th at 630. So we hope you'll join. And we are planning for next year. We have a lot of new topics for next year that we're excited. And we'll have a new registration coming out probably in December for you to register for the whole series again next year. So we'll be offering monthly classes in 2026. So thank you again for joining. And thank you so much again, Jennifer, for all the knowledge that you shared. And we hope you all have a wonderful holiday, debt-free, hopefully, right, with some of these tips. Absolutely. And enjoy the rest of your evening. Yes. Thank you so much, everyone. Thank you for attending. Thank you.