The Richmond Register

Lifestyles & Community

August 5, 2009

Controlling spending

Gina Noe

When the family faces reduced income, take immediate action to stop all excess spending. Whether your situation is temporary or extended, you need to get the most for your money.

Studies have found that many families do not adjust their lifestyle for about six months after their income is reduced. That six months of ignoring the situation can bring disaster. When you take charge of your financial situation immediately, you are making a positive contribution to your family’s well-being now and in the future.

Following basic money management principles can reduce stress and help you adjust to living on less income. Make a list of the family’s most important expenses while you have less income. This means taking a tough look at needs vs. wants. Explain that, for awhile at least, needs may be all your family can afford. Things like cable or satellite, eating out, and expensive phone plans may be among the first things to be cut.

Make a family spending plan to decide where your money will go. The first step in making a budget or spending plan is determining where you money is going now and then making adjustments. Once you make a plan stick to it. With less income each spending decision is critical.

Most people give high priority to fixed expenses such as rent or mortgage payments, insurance premiums, car payments and installment debt. Flexible expenses such as food, utilities, clothing, and household expenses can be more easily adjusted to fit your income. Most people find it easier to cut back on flexible expenses.

As you make your plans, ask how spending can be reduced:

— Can we substitute a less costly item, or do without it completely?

— How can we conserve resources and avoid waste?

— Are there opportunities to cooperate with others by trading or sharing resources?

— Can we save if we do it ourselves?

All family members need to work together to reduce spending. When everyone pulls together, you are more likely to succeed in living on less.

In future articles, I will be sharing specific money saving tips. If you would like additional information now, call the Extension Center, 623-4072.

Educational programs of the Cooperative Extension Service serve all people regardless of race, color, age, sex, religion, disability or national origin.

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