With a fragile economy, high unemployment rates, employee benefit cutbacks and other negative economic realities, many people feel out of control with their personal finances.
What can we do? Have a plan to take control of your finances during these uncertain financial times.
Below are six strategies to take charge of your finances:
n Program your dollars. Develop a spending plan (budget) where income is greater than or equal to savings plus household expenses. You can go to http://fcs.tamu.edu and get a copy of an excellent budget worksheet.
n Build precautionary savings. Having a chunk of money in the bank increases feelings of control during a financial crisis. Many financial experts today recommend holding more than the “standard” three to six months of expenses because it is taking laid-off workers longer to find new jobs. Realistically, many people don’t have savings anywhere near this level, but it is important not to give up. Any amount of savings is better than none, and the more money people have set aside, the bigger their war chest to tap during a financial crisis.
n Downsize your debt. A financial crisis event is less stressful when an individual or family isn’t carrying a lot of non-mortgage debt and making payments equal to 10 percent or more of their take-home income. Pay off outstanding balances as quickly as possible. The website www.powerpay.org has a debt repayment calculator that shows the time and interest saved by accelerating debt repayment.
n Practice healthy behaviors. Like outstanding debt, health problems compound the effects of a financial crisis. Do what you can to stay healthy and avoid non-routine medical expenses. Eat nutritious food, exercise at least 30 minutes a day, lose weight (if necessary), and quit smoking (if applicable). When people invest in their health, they reduce the risk of incurring expensive medical bills.
n Develop a sideline source of income. When you’re concerned that your day job might end with a pink slip, it helps to have another source of backup income. Investigate opportunities to freelance your skills during off-work hours and develop a base of satisfied customers. A sideline business can also provide an opportunity to learn new skills and expand your network.
n Take a class. The Texas A&M AgriLife Extension Service is offering a class titled “Money Talk” at North Central Texas College’s Corinth campus. This four-lesson class will help you to develop a budget, reduce debt, increase savings and plan for the future.
To register, call 840-498-6270 and ask to register for “Money Talk.” The course ID is FIN 1000 040 1230.The class is from 5 to 6:30 p.m. on Thursdays in April. Registration deadline is April 1. For more information about this class, call the Texas A&M AgriLife Extension Service at 940-349-2882.
MAGGIE JOVER is the family and consumer sciences county extension agent with Texas AgriLife Extension. She can be reached at 940-349-2882.