LIFESTYLE

Make a financial resolution

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Farm Forum

BROOKINGS — If finances were a part of your 2014 New Year’s resolutions, creating a household budget is a great way to accomplish financial security.

“A budget helps you to know where your money is going and if any savings can be found each month,” said Carrie Johnson, SDSU Extension Family Resource Management Specialist. “By setting a budget, you can reach your financial goals.”

The following tips will help you set up your monthly household budget:

• The most important part of creating a budget is to make sure that it is simple and realistic. A typical budget contains three sections which include income (money you earn), expenses (money you spend), and an ending balance (money left after expenses are paid). Making sure that you set a realistic budget will help in less frustration and less adjustments later.

• Talk with family members about the budget. 1) List your outstanding debts and plan how much you need to spend each month to pay them off; 2) track all take-home income as well as fixed, flexible, and occasional expenses; and 3) find your monthly subtotal and compare the costs per month with net monthly income. Use any overages to increase your savings or pay down your debt.

• Start an emergency fund. You should have 3-6 months of expenses in an account that is easily accessible. This isn’t something that happens overnight and may take months or even years to complete.

• Track your expenses every month. A budget is a working document and may need to be updated from time to time.

If you don’t stick to your budget one month, Johnson said not to get discouraged.

“If you aren’t meeting every spending category each month just start again and do your best to stick with it,” she said. “Remember, we are more likely to follow-through with something if it is in writing. Have your financial goals posted somewhere that you are reminded of them frequently and have your household budget ready to update easily.”

To learn more, visit iGrow.org.