| Were you one of the many people who overspent this holiday season? If so, the New Year is a good time to take control of your finances. Kaye Kasza, educator with Colorado State University Cooperative Extension, provides the following strategies to get a handle on your money.
Get an overview of your money. Write down how much you earn and list all the money you owe. Figure your earnings on a daily basis to become more aware of how long it takes to pay for what you are considering buying, and how hard it is to pay off what you still owe.
Keep a spending diary. Write down what you plan to buy and your thoughts and feelings about your choices. After shopping, honestly record your spending and your emotions so you can better understand what tempts you to overspend.
Avoid temptation. Certain environments and/or situations trigger spending. Maybe you always buy when you go to the mall, or perhaps you start out shopping for one thing and impulsively buy several others. You can slow down the spending process in these situations by making and using a list, or by taking along a trusted friend who does not often overspend.
Another idea is to identify a long-term spending goal you really want to achieve—such as a new home, vehicle, or vacation. Then take a photo that reminds you of your dream along when you shop. Use it to remind yourself of your goal.
In the meantime, if money is tight you can reduce your expenses by:
* recording regular expenditures.
* planning ahead for big expenses such as insurance, taxes, and holiday spending. Put aside funds each week for these major expenditures.
* using cost-cutting strategies that fit your family. This might include cooking from scratch, borrowing books or movies from the library, or wearing 'hand-me-down' clothes.
* putting your credit cards on hold for the time being. Pay for things with cash or don’t buy it at all. If willpower is a problem, freeze your credit cards in a bowl of water. Then the next time you want to use them, you’ll need to wait until the water has melted which gives you time to think before using the card.
* making gifts instead of buying them. Take on do-it-yourself projects instead of hiring work done.
Penn State is committed to affirmative action, equal opportunity and the diversity of its workforce.
Karen Thomas is a family and consumer sciences educator for Penn State Cooperative Extension of Lackawanna County.
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