SPENDING IN THE
DARK
Bill Taylor
UW Extension
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...
OTHER SPECIAL EVENTS


How do you plan spending for:
◦
◦
◦
◦

Birthdays?
Vacations?
Graduation?
Etc.
PERIODIC SPENDING


How do you plan for larger expenses
that only happen now and then?
◦ i.e.





Property taxes
Car...
LIGHTING UP THE DARK
Unless you use some proven methods,
handling these types of expenses is like
shooting in the dark at ...
TRACK YOUR
SPENDING
THE DARK
You are spending in the dark until you
know what your NEEDS and WANTS are
costing you
THE DAWNING


Track your expenses
◦ Save a receipt for EVERY purchase
◦ For 3 months – for average and accuracy
◦ Every n...
ENTERING EXPENSES
Enter weekly
 Total monthly


◦ Add all the category totals to check your
total spending for the month
SET GOALS
FINANCIAL GOALS


Determine your major household
financial goals
◦ i.e. – down payment on a home, paying
off debts, new c...
KEY


Key to goal accomplishment:
◦ WRITE THEM DOWN
◦ REVIEW THEM EVERY TIME YOU PAY
BILLS

 They become part of your su...
ESTABLISH BUDGET
DEVELOPING A BUDGET


Most accurate after 3 months of
tracking expenses
◦ But you don’t have to wait 3 months to
start

L...
EXPENSES


Two ways to group
◦ Needs vs. Wants
 Needs – what you have to have to live
 Basic food, rent/mortgage, basic...
EXPENSES (cont.)


Two ways to group (cont.)
◦ Fixed vs. Variable
 Fixed – the same each month
 Few basic bills
 Relat...
PERIODIC EXPENSES


List those periodic expenses we
started the lesson discussing
◦ Determine how much you need or want t...
PERIODIC EXPENSES (cont.)
◦ Determine how many months you have to
put money away for each and divide that
number into the ...
BUDGET COMPLETION


List anticipated:
◦ Income
 Total

◦ Fixed Expenses
 Total

◦ Variable Expenses
 Total



Subtrac...
NEGATIVE BALANCE


If final budget figure is a negative, you
MUST change something
◦ Increase income
◦ Decrease expenses
...
Next month:
December 5 @ 7:00 p.m.: Communication about Finances and
Estate Planning
by Cole Ehmke, Extension Educator
Go ...
Spending in the Dark
Spending in the Dark
Spending in the Dark
Spending in the Dark
Spending in the Dark
Spending in the Dark
Spending in the Dark
Spending in the Dark
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Spending in the Dark

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Will you go over budget this holiday season? How will you know? Learn how to budget for periodic expenses. Learn how to track spending so you know how much you have to spend.

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Spending in the Dark

  1. 1. SPENDING IN THE DARK Bill Taylor UW Extension Northeast Area Community Development Educator
  2. 2. CHRISTMAS IS COMING!! How many $$ can you afford?  How much did you spend last year?  How much do you have set aside for Christmas spending?  How much can you afford to set aside next year for Christmas spending? 
  3. 3. OTHER SPECIAL EVENTS  How do you plan spending for: ◦ ◦ ◦ ◦ Birthdays? Vacations? Graduation? Etc.
  4. 4. PERIODIC SPENDING  How do you plan for larger expenses that only happen now and then? ◦ i.e.     Property taxes Car license Car and homeowner’s insurance Major repairs or maintenance
  5. 5. 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.
  6. 6. TRACK YOUR SPENDING
  7. 7. THE DARK You are spending in the dark until you know what your NEEDS and WANTS are costing you
  8. 8. THE DAWNING  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
  9. 9. ENTERING EXPENSES Enter weekly  Total monthly  ◦ Add all the category totals to check your total spending for the month
  10. 10. SET GOALS
  11. 11. FINANCIAL GOALS  Determine your major household financial goals ◦ 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?
  12. 12. KEY  Key to goal accomplishment: ◦ WRITE THEM DOWN ◦ REVIEW THEM EVERY TIME YOU PAY BILLS  They become part of your subconscious mindset
  13. 13. ESTABLISH BUDGET
  14. 14. DEVELOPING A BUDGET  Most accurate after 3 months of tracking expenses ◦ But you don’t have to wait 3 months to start List total anticipated income for an average month  List anticipated expenses for an average month  ◦ Divide the expenses into groups to help in deciding how much they will be
  15. 15. EXPENSES  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  Needs must be paid before wants are considered
  16. 16. EXPENSES (cont.)  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, etc.  Must track over several months to be accurate  Repeat whenever situation changes or the budget needs major adjustments
  17. 17. PERIODIC EXPENSES  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
  18. 18. 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.  Christmas gifts  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
  19. 19. BUDGET COMPLETION  List anticipated: ◦ Income  Total ◦ Fixed Expenses  Total ◦ Variable Expenses  Total  Subtract total Fixed & Variable expenses from total Income ◦ Is there enough income to cover the expenses?
  20. 20. NEGATIVE BALANCE  If final budget figure is a negative, you MUST change something ◦ Increase income ◦ Decrease expenses ◦ Dip into savings - this can’t continue
  21. 21. Next month: December 5 @ 7:00 p.m.: Communication about Finances and Estate Planning by Cole Ehmke, Extension Educator Go to http://www.uwyo.edu/ces/money/

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