Successfully managing your finances during tough economic times may prove challenging, but an organized spending plan can help you better manage your money and allow you to cut unnecessary expenditures to prevent debt increases. The following tips, courtesy of the University of Florida Institute of Food & Agricultural Sciences (IFAS) Extension, are designed to help you determine how much you have to spend and where you are spending your money.

1)     Understand the Nature of Your Expenses:

·         Fixed expenses occur on a predetermined schedule and are for a set amount (ie: car payment, rent, etc.).

·         Variable expenses usually occur on a predetermined schedule, but may change in amount (ie: cell phone and/or utility).

·         Discretionary expenses are completely up to you (ie: eating out, clothing expenses).

2)     Identify  Your Cash Flow:

·         Determine your surplus or deficit by subtracting your taxes and expenses from your income (Income – taxes – expenses = surplus or deficit).

·         Surplus funds can be used to save, pay down debt or work toward some other goal (ie: saving for college or a home).

·         A deficit indicates that you are spending more than you make, and likely taking on debt. This often occurs when credit cards are used for ordinary expenses. In this instance, it is necessary to either increase income or reduce debt.

3)     Prioritize Your Expenses

·         Consider the consequences of eliminating an expense. What will be the results?

·         Missing payments on housing, basic utilities, and debt can result in penalties, foreclosure, repossession, shut-off notices, etc.

·         Avoid convenience expenditures for items and services such as eating out and/or lawn service to help you better balance your budget.

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