budgeting

Enjoy Your Wants

When it comes to money, most of us know the difference between needs and wants. Needs are basic items like housing, food, utilities, and transportation. Wants, on the other hand, are the extras that can make life more enjoyable, such as eating out, new clothes, subscriptions, or the latest gadgets. While there’s nothing wrong with spending on wants, the key is to keep track of them, to ensure they don’t take over your budget.

Tracking your wants helps you understand where your money is really going. It’s easy to swipe a card or click “buy now” without realizing how quickly those small purchases add up to big dollars. Coffee runs, takeout meals, or online impulse buys can quickly add up to hundreds of dollars each month. Writing them down or using an app to record these expenses makes your “want” spending visible, and visibility creates awareness.

Awareness then leads to control. Once you see the total of your wants, you can decide whether that money is truly giving you value. Maybe you’ll notice that you’re happier spending money on events or time with friends, rather than random online orders. Or perhaps you’ll decide to cut back in one area so you can save up for something bigger, such as a vacation.

Tracking wants also helps build healthy financial habits. Instead of feeling guilty about spending, you can set a budget for the wants you decide on. For example, you might give yourself $100 a month for coffee money. When you know you’ve set a budget, you can enjoy those wants without stress.

In the end, money should support both your needs and your happiness. By keeping an eye on your wants, you’ll avoid overspending, reduce financial stress, and make your money work in a way that truly matches your goals.

woman counting money with a planner in front of herSource: U.S. Department of Health and Human Services. (n.d.-b). Develop your budget. National Institutes of Health. https://grants.nih.gov/grants-process/write-application/advice-on-application-sections/develop-your-budget

Written by: Alisha Barton, Extension Educator, Family & Consumer Sciences, Ohio State University Extension, Miami County

Reviewed by: Zoie Clay, Extension Educator, Family & Consumer Sciences, Ohio State University Extension, Lawrence County

Ohio Saves Week Kicks-off

Save today for tomorrow

Make time to shout out for Ohio Saves Week February 27 – March 3.

Take this opportunity to improve your financial wellness by joining the movement!  This is a good time of year to set a goal, make a plan and keep in touch as we as citizens and taxpayers gather our receipts, statements and W-2 forms to file income tax and pay our fair share for living and working in the United States of America.

  • Kick-off the week by taking the America Saves Pledge

PLEDGE NOW

  • Join a daily lunch and learn from 12:00-12:30 pm to explore this year’s theme, “A Financially Confident You” For more details, including registration for the lunch and learns click on link below:

PLEDGE NOW!!

Whether you are hoping to begin saving or are working toward a specific goal, Ohio State University Extension Educators are ready to share tools and information to support you on your way.  Savers who make a plan are twice as likely to save successfully.

Keep thinking as we follow the lead from a popular Broadway musical Annie!

Tomorrow “You’re only a day away”

Written by:  Margaret Jenkins, OSU Extension Educator, Clermont County, jenkins.188@osu.edu

Reviewed by:  Beth Stefura, OSU Extension Educator, Mahoning County, stefura.2@osu.edu

References:

https://americasaves.org/for-savers/pledge/

https://americasaves.org/connect-to-a-campaign/ohio-saves/

Koskelainen, T. “Financial literacy in the digital age-Research agenda.” The Journal of Consumer Affairs Volume 1 (2023): 1-22

Reduce Stress: Fill Your Hope Chest

filling your hope chest

Let’s focus on Financial Wellness for a minute! 

Are you one of the almost three in four Americans surveyed recently by the American Psychological Association who said they are experiencing financial stress? Financial stress can affect people physically, emotionally, and psychologically and result in unhealthy coping behaviors.

Financial wellbeing includes being fully aware of your financial state and budget and managing your money to achieve realistic goals. When you analyze, plan well, and take control of your spending, you can make significant changes in how you save, and ultimately how you feel resulting in living a more hopeful life. 

Ohio State University Extension designed an Accounting for Your Money Hope Chest to “help people help themselves” as we work to achieve financial wellness during this time of rapid social and economic change. Managing and controlling our spending and saving is needed to build hope and manage emergent financial stress.

The purpose of the Hope Chest is for individuals and families to –

  • Prioritize spending by separating needs from wants
  • Identify realistic/SMART goals
  • Gather current financial spending and saving information
  • Locate emergency resources
  • Analyze their current budget
  • Develop a “new” Accounting for Your Money calendar
  • Take control of spending resulting in more saving for family goals

Work through the steps of the Accounting for Your Money Hope Chest with your family members and/or co-spenders as you and your family adjust to changing basic needs and wants. Determine how to best spend your money during this period of rapid social and economic change. Your family will be empowered to meet the new challenges brought about by the change, reducing financial emergencies and easing future financial stress.

Written by Margaret Jenkins, Assistant Professor, Family and Consumer Sciences, OSU Extension Clermont County

Reviewed by Nannette L. Neal, Extension Educator, Agriculture and Natural Resources, OSU Extension Clermont County

Sources: 

Spring Clean Your Finances!

Spring is one of my favorite seasons. It represents a restart with fresh beginnings.  Spring cleaning may look different for each person and may include deep cleaning your house, preparing your garden, washing windows, and it can also mean spring cleaning your finances.

Spring cleaning your finances can provide a fresh look at your financial situation and help clean up some financial messes with your money. Here are four places to start:

dollar bills planted in fresh soil

Spring Clean Your Spending Plan: Now is a great time to adjust your spending plan. Is your current money flow where you want it to be? If you are not sure, begin by writing each and every expense on a calendar or journal for a week or a month. Observe where your money is being spent and how much is being spent. Then adjust your spending (one less coffee a week) or adjust your budget (add money to your eating out budget and reduce entertainment) to make it fit your goals.

Spring Clean Your Recurring Monthly or Subscription Payments: These are the payments that are set up to withdraw funds from an account or your credit card each month. A recurring monthly payment may be a cable bill, car payment, or student loan payment. Subscription payments are automatic and typically on an annual or monthly schedule. Subscriptions may be an annual fee for shopping discounts to a favorite store, a car wash pass, or a fitness club membership. Each fee continues until you cancel it.  First, consider if you are still using or needing the subscription. If you are paying $30 a month for a gym membership, yet in the past three months you’ve only found 2 opportunities to go, your cost per workout is $45. Or perhaps you no longer visit a store that one time was a favorite, but still pay the $25 annual fee for their store discount.

Spring Clean Your Credit: Take each loan and credit card you currently have and list the amount owed (not the monthly payment or minimum payment) and the interest rate being paid. If that list surprises you, it may be time to clean up the situation.  Work on paying down those balances with a debt snowball method or a debt avalanche method.  A debt snowball pays the smallest debt with every extra dollar possible until it is paid off, then proceeds to the next smallest debt with the additional available money. It snowballs into a larger and larger payment with fewer and fewer debts.  The debt avalanche method tackles repayment on debts starting with the highest interest rates. Once one is paid off the next highest interest rate loan can be paid with money previously allocated to the previous loan and the current loan.  The avalanche continues until debts are all repaid.

Spring Clean Your Wallet: Your wallet may represent your daily connection to money transactions. According to Experian, Americans carry an average of 3.84 credit cards which is down from 4 previous to the pandemic.  In your wallet, do you have credit cards you no longer use? Now is a good time to remove or discard them. Make sure you have your remaining cards inventoried with contact information of whom to contact if they are lost or stolen.  Also, while cleaning your wallet look for gift cards that may carry balances.  Over half of Americans carry unused gift cards and nationally have a balance of over $21 billion. Find your cards and be intentional about using, regifting, donating, or cashing in the balance.

Where will you start? Spring clean your finances one project at a time and enjoy the reward of money well spent and even better saved.

Written by: Melissa J. Rupp, Extension Educator Family and Consumer Sciences, Fulton County

Reviewed by: Emily Marrison, Extension Educator Family and Consumer Sciences, Coshocton County

Sources:

Adamczyk, Alicia. “Half of Americans have unused gift cards, and it’s costing them over $21 billion” 18 Feb 2020, CNBC Make It, https://www.cnbc.com/2020/02/14/americans-have-over-21-billion-in-unused-gift-cards-and-store-credits.html

Stolba, Stefan Lembo. “What Is the Average Number of Credit Cards per US Consumer?” 8 Apr 2021, Experian, https://www.experian.com/blogs/ask-experian/average-number-of-credit-cards-a-person-has/  

Tardi, Carla. “Debt Avalanche Definition.” 5 Aug 2020, Investopedia, https://www.investopedia.com/terms/d/debt-avalanche.asp

Picture Credit: https://pixabay.com/photos/money-grow-interest-save-invest-1604921/

Are You Ready for Homeownership?

house on a hill with a tree

Have you been thinking about buying your own home? It’s the American dream, right? Well, if you are not prepared, that dream can become a nightmare. Buying a home may well be the single largest purchase you ever make, so ensure you are making informed decisions throughout the homebuying process. You may be asking yourself “what process?” It is not as simple as picking a home and moving in. There are things you can do before you ever begin looking for a house, and some of them can save you money in the long run. Here are 3 items that should be on your “to do” list prior to purchasing a home.

Identify your reasons for wanting to become a homebuyer, then examine the advantages and challenges.

Advantages may include:

  • A place of your own
  • Financial incentives
  • Scheduled savings
  • Stable housing costs
  • Increased value
  • Tax benefits

Challenges may include:

  • High cost of home ownership
  • Decreased mobility
  • Repair and maintenance
  • Possibility of foreclosure

Get your credit in shape.  Lenders use your credit score to determine your ability to make timely payments, manage credit limits and utilize different types of credit. The higher your score, the better chance you have at a lower interest rate, which can mean thousands of dollars over the course of your loan. Did you know you can receive a free copy of your credit report once a year from each of the three nationwide credit reporting companies (Equifax, Experian, and TransUnion)?  Visit annualcreditreport.com to order a copy. If you notice a mistake, you should report the discrepancy to have it removed.

Determine your budget and then shop around. When determining your budget there are a few things to consider. In addition to the money that you borrow (principal), you will pay homeowner insurance, and taxes (escrow), and interest. These items are often added together to make up the total monthly payment. You should also budget for other household expenses such as utilities, homeowner association fees, and general upkeep and repairs. A good place to start is to calculate your debt to income (DTI) ratio. Your DTI is all your monthly debt payments divided by your gross (before taxes and other deductions) monthly income. A general rule of thumb is to keep DTI under 36% (this number can fluctuate). 

Once you have your budget, shopping homebuyer assistant programs can pay off. The Ohio Housing Finance Agency has programs available for first-time buyers, veterans, college graduates, and first responders just to name a few. These types of programs often help with down payments, closing costs, or other pre-closing expenses.

You may also want to consider getting pre-approved with a reputable lender. Being pre-approved means you qualify for a loan, tells sellers you are a serious buyer, and helps you better understand your housing budget.

The journey to homeownership can be exciting. It builds wealth, increases stability, and even produces health benefits. When you are ready, visit the Homebuyer Education page through The Ohio State University Extension website to learn more.

Written by: Heather Reister, Family and Consumer Sciences Educator, Ohio State University Extension Butler County.

Reviewed by: Roseanne Scammahorn, Family and Consumer Sciences Educator, Ohio State University Extension Darke County.

Sources:

“Homeownership Costs: PMI, Taxes, Insurance and Hoas.” My Home by Freddie Mac, https://myhome.freddiemac.com/owning/homeownership-costs.

Healthy Homes – Habitat for Humanity. http://www.rchfh.org/wp-content/uploads/2019/01/Healthy-Homes.pdf.

“Homebuyer Education.” Homebuyer Education | Family and Consumer Sciences, https://fcs.osu.edu/programs/healthy-finances-0/homeownership/homebuyer-education.

“The Ohio Housing Finance Agency (OHFA): Home Page.” The Ohio Housing Finance Agency (OHFA) | Home Page, https://ohiohome.org/.

“Your Credit Report and FICO® Score-All Free.” Experian, https://www.experian.com/.

“Credit Scores, Credit Reports & Credit Check.” PERSONAL, 25 Jan. 2022, https://www.transunion.com/.

“Equifax: Credit Bureau: Check Your Credit Report & Credit Score – United States – Evo Prod.” United States, https://www.equifax.com/.

“Home Page.” Annual Credit Report.com – Home Page, https://www.annualcreditreport.com/index.action.

“Common Questions from First Time Homebuyers.” HUD.gov / U.S. Department of Housing and Urban Development (HUD), https://www.hud.gov/topics/common_questions.