How to Manage Your Budget

Are you finding it harder to make ends meet? Many people are having to adjust their spending with rising prices on everything from groceries to gasoline.

But even as prices rise, most families can find a little room in their budgets by taking a close look at where their money goes each month. April is Financial Literacy Month, and what better time to take a good look at your budget? These steps from the University of Georgia Extension can help.

The first step to improving your budget is to look at where you spend your money each month. This step can help you understand where you need to make changes.

Make a list of all your bills, such as utilities, debt payments, and services, like cable or streaming.

Keep track of how you spend your pocket money. This is where many budget leaks can be found. For a week or two, write down each purchase you make. This will give you a good idea of where this money goes but, tracking it for longer will make the total spent more accurate.

Categorize your expenses to condense the items on your list. For example, lump all utilities together and all debt payments together.

Then, compare your spending to your monthly income by subtracting your monthly expenses from your monthly income. Did you spend more than you made?

If you find you are spending more than you make, look at the areas where you are overspending. Decide how to reduce that spending, but focus on one or two areas at a time instead of making several drastic changes all at once.

Be sure to involve everyone in the household, and ask for their suggestions about how to reduce spending. Work together to come up with reasonable ways to reduce spending, including finding less expensive alternatives to activities or treats you enjoy. Post the spending plan where everyone can see it, and reevaluate the budget on a regular basis.

Our Mississippi State University Extension publications can also help you navigate financially after a disaster or when your income drops:

Want to teach middle, high school, and college students about financial literacy? Check out our “Welcome to the Real World! Budget Simulation” program. This program is delivered in schools and gives students the opportunity to learn more about properly managing a budget. Contact your local Extension office if you are interested in having the program delivered in your school.