• By Elizabeth Coots, Extension Agent

Family and Consumer Sciences

Stretching your dollar At the end of the year, do you wonder what happened to your money? Are you regularly tempted to spend when you have a few extra dollars in your pocket? Spending and savings habits are directly linked to financial stability. Understanding how and where you spend money is important for financial success, especially in tough economic times. You can take several steps to maximize your money each month.

• First, get organized. Keep all of your bills and important financial papers in one place. Track your spending for one month by writing down your expenses, including big expenses such as rent and car payments, as well as the little everyday expenses, such as vending machine purchases. Remember that small expenses add up over time, so it is important to include them in your spending log. Next, identify the total amount of money you earn for the month. This includes take-home pay, any investment income or additional income from a second job.

• Develop a plan on paper for how you will spend your money each month. Remember that for big expenses, such as car insurance, vacations or holidays, you may want to set aside a little each month, so you are prepared when these events occur.

• After two to three months, evaluate the spending plan. Are you overspending in any certain category? If so, readjust it to more accurately reflect your spending habits or identify alternatives to help reduce expenses. Keep working at your spending plan until you find a combination that works for the needs of your family.

• To save more, consider changing your shopping habits. It is important to realize that stores arrange goods and merchandise to tempt you to make a purchase. Stores use sales signs, displays and salespeople to draw your attention to specific items. Next time you are at the store, try to identify the stimulus that encourages you to buy, and then try to avoid these areas in the future. Other tips for breaking bad spending habits include limiting the number of trips you make to the store. The less often you shop, the less likely you will be tempted to make unnecessary purchases. Make certain you have a plan prior to entering the store. Know why you are there and stick to your shopping list. If you see an item that you would really like to purchase, identify alternatives first.

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