EXTENSION REPORT

Who Needs a Budget?

As we begin this New Year, after recuperating from the holidays it is time to get serious. More holidays will be forthcoming along with the usual graduation, weddings and births.  So now is the time to take the necessary steps toward a balanced budget. Who needs to budget? Well we all could benefit from having a budget. We all do some form of  budgeting without writing it down; this is where the problems arise. We must start to think through and list our goals for the short term and long term. A short term is within the next few months and long term the next year or two. One mistake we sometimes make is not including all of our family members in on our decision to trim cost and cut corners. Communication is key in deciding how income is to be allocated. Listing the goals and discussing them will help family members understand and respect the desires of others.

First, calculate your total income after taxes and withholdings. Your total income may include interest and dividends, income from rental property, gifts and bonuses, pensions, social security, annuities, IRA and the sale of property. Then, deduct the fixed expenses, rent, or mortgage payments, insurance premiums, education-tuition, property taxes, and installment payments which occur on regular bases. Next, list your day to day expenses that have some flexibility to them like eating lunch out every day. After you have deducted all of your fixed and flexible expenses the remainder is what you have to live on. If your financial situation does not allow you to do everything that you feel you need to do, then you need to lower fixed expenses or supplement your income.

To get a sample budget, start with Extension’s Money Management Calendar which is available as quantities last at your county extension office. Do your budget on a monthly or paycheck basis. Reminder, set up an emergency savings fund. A good way is to have the amount automatically deducted from your checking account. In that way, you will not miss it and your savings can grow. Decrease your debt load (pay off lower bills first). Construct or update your will. By starting the year with a written budget, you may lower the stress you feel when you have over extended yourself and not budgeted for the necessary and important events in your life.

Email address: aoutlaw@aces.edu
Phone: 937-7176 or 943-5611, 928-0860, ext. 2222

Issued in furtherance of Cooperative Extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, and other related acts, in cooperation with the U.S. Department of Agriculture. The Alabama Cooperative Extension System (Alabama A&M University and Auburn University) offers educational programs, materials, and equal opportunity employment to all people without regard to race, color, national origin, religion, sex, age, veteran status, or disability.