SPENDING IN THE
Northeast Area Community Development Educator
CHRISTMAS IS COMING!!
How many $$ can you afford?
How much did you spend last year?
How much do you have set aside for
How much can you afford to set aside
next year for Christmas spending?
OTHER SPECIAL EVENTS
How do you plan spending for:
How do you plan for larger expenses
that only happen now and then?
Car and homeowner’s insurance
Major repairs or maintenance
LIGHTING UP THE DARK
Unless you use some proven methods,
handling these types of expenses is like
shooting in the dark at a moving target.
You are spending in the dark until you
know what your NEEDS and WANTS are
Track your expenses
◦ Save a receipt for EVERY purchase
◦ For 3 months – for average and accuracy
◦ Every nickel, dime, and dollar
Write yourself a paper receipt when you don’t
get one from the vending machine, etc.
◦ Every week sit down with your receipts
and record your expenditures on a
spending record, within categories
◦ Add all the category totals to check your
total spending for the month
Determine your major household
◦ i.e. – down payment on a home, paying
off debts, new car, etc.
◦ List them
◦ Determine a time line or deadline for each
◦ Determine a cost for each
◦ Prioritize – which comes first?
Key to goal accomplishment:
◦ WRITE THEM DOWN
◦ REVIEW THEM EVERY TIME YOU PAY
They become part of your subconscious
DEVELOPING A BUDGET
Most accurate after 3 months of
◦ But you don’t have to wait 3 months to
List total anticipated income for an
List anticipated expenses for an
◦ Divide the expenses into groups to help in
deciding how much they will be
Two ways to group
◦ Needs vs. Wants
Needs – what you have to have to live
Basic food, rent/mortgage, basic transportation,
minimal clothes, medical, insurance, etc.
Wants – extras for comfort and enjoyment
Entertainment, electronics, snacks, knick knacks,
eating out, etc.
Be careful you don’t justify wants as
Needs must be paid before wants are
Two ways to group (cont.)
◦ Fixed vs. Variable
Fixed – the same each month
Few basic bills
Relatively easy to list
i.e. rent, housing payment, car payment, insurance,
child care, etc.
Variable – varies month to month
i.e. food, clothing, medical, entertainment, gas & oil,
Must track over several months to be accurate
Repeat whenever situation changes or the budget
needs major adjustments
List those periodic expenses we
started the lesson discussing
◦ Determine how much you need or want to
spend on each
i.e. bi-annual property taxes - $1000, Christmas
gifts - $500
PERIODIC EXPENSES (cont.)
◦ Determine how many months you have to
put money away for each and divide that
number into the total amount
Property tax - $1000 ÷ 6 mo. = $167/mo.
Saving all year - $500 ÷12 mo. = $42/mo.
Starting in August - $500 ÷ 4 mo. = $125/mo.
Decide whether the periodic expense
is a fixed or a variable expense and
list the monthly amount in that group
◦ Fixed Expenses
◦ Variable Expenses
Subtract total Fixed & Variable expenses
from total Income
◦ Is there enough income to cover the
If final budget figure is a negative, you
MUST change something
◦ Increase income
◦ Decrease expenses
◦ Dip into savings - this can’t continue
December 5 @ 7:00 p.m.: Communication about Finances and
by Cole Ehmke, Extension Educator
Go to http://www.uwyo.edu/ces/money/