Is Your Spending Plan Working?

A spending plan (aka “budget”) is a key to taking control of your money. But it’s not enough to make a spending plan. To get results, you need to go the next step and work your plan.

Think about it: you could make a plan that works out perfectly on paper — all your bills are paid, you have enough money for needs like groceries and gas and also some fun, AND you also put some money toward your longer-term financial goals. However, if your plan calls for spending $500 a month on groceries, and you actually spend $700 on groceries, then your plan is wrecked. You’ll end up with unpaid bills, unmet needs, and/or zero progress toward your goals. Even a “perfect” plan is no good if you don’t follow it.

Following a spending plan doesn’t have to be difficult, but it does take some attention: you’ll need a strategy to help you stay within the spending limits of your plan. In other words, you’ll need some method of tracking or monitoring your spending.

Let’s stick with the grocery example above. Perhaps we go to the grocery store 6-8 times during a month. If we want to make sure we keep our grocery spending below $500, we’re going to need some type of on-going record of what we’re spending. Maybe we just keep a list of grocery spending. Maybe we use a paper ledger form, an excel spreadsheet or a purchased software program. Maybe we use an app on our phone designed for that purpose. We could even put $500 cash in an envelope and only buy groceries using that cash — that way we would be unable to spend more than we planned.

A note of realism: unexpected events can interfere with our plans. A grocery example: suppose relatives decide to come visit you for a weekend. Suddenly your original grocery allotment of $500 might no longer be sufficient. Your plan will need to change. It’s your plan – you are free to change it if you need or want to change it! And here’s the good news – that change doesn’t have to wreck your plan! By keeping track and being aware that you are spending extra on groceries, you will know that you need to reduce your spending in some other area to compensate for your extra grocery spending. You will adjust your overall plan intentionally to accommodate the change.

Finding the right tool. There are multiple tools and strategies available to help with following your plan; different tools suit different people, so consider what will be most workable for you. The ISU Extension publication “Tracking Your Spending” provides a helpful overview of basic methods. Because no publication can keep up with the ever-changing landscape of software and mobile applications, some online research will be needed if you want to explore and compare those options.

For Iowans who would like help with making and following a spending plan, Extension specialists are available for one-on-one consultations, either in person or via phone or zoom. Don’t hesitate to contact us!

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Make the Most of Financial Literacy Month

April is Financial Literacy Month! This annual event reminds us ALL that we are never “done” with financial literacy. The world changes, financial products change, and our own needs change — that means we always need to keep learning about financial topics.

What do you want to learn more about when it comes to finances?

  • Is buying a home on your radar sometime in the next few years?
  • Do you need a retirement checkup to see if you are on track to meet your goals?
  • Do you want to start saving for your children’s education after high school?
  • Are you having trouble keeping up with your daily-weekly-monthly financial challenges?

Set a goal NOW to take steps toward being the informed consumer and financial manager you want to be! See below for ideas that will help you address the four questions above. And subscribe to MoneyTip$ to make sure you get ongoing reminders and updates on financial topics.

Remember that financial literacy is not just for young people, or for people who don’t know how to manage their money. Financial literacy is an ongoing topic for EVERYONE!

Ideas to help with the questions above:

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Emergency Savings: How Much Do I Need?

Prior to the Covid-19 pandemic, approximately 30-50% of adults in the United States (depending on the study) would struggle when faced with an unexpected or emergency expense. While the percentage of affected adults improved with the arrival of COVID relief programs, recent data shows that the numbers may be trending back down toward pre-pandemic levels. The aggregate data will continue to show these fluctuations over time depending on the macroeconomy, significant policy changes, etc., so a more immediate question for consumers is:  How much do I need in my emergency savings account? $400…$1,000…3-6 months of expenses? The answer is not concrete and completely depends on your own personal situation, but here are some things to consider:

  1. How large is your household? – the necessary living expenses for a single individual will likely look much different than a household of four.
  2. Do you own a home or rent? – homeowners face the risk of repair costs, which increases their need for emergency savings. The recent derechos are a perfect example.
  3. What are your insurance deductibles? – this is an often-overlooked aspect of emergency savings. Auto insurance deductibles tend to be around $250 or $500, while health insurance and homeowner’s insurance deductibles could be in the thousands. A higher deductible provides lower premium costs, but does increase your need for emergency savings.
  4. How stable is your income? – are you self-employed or an independent contractor? Do you work in a high-turnover industry or face occasional government shutdowns? How likely you are to need those savings to make up for lost income should also factor into the amount saved.

This is not meant to be an exhaustive list, but rather a starting point for your emergency savings plan. For the DIY-ers, I encourage you to utilize PowerPay, Utah State University Extension’s free, online, personal finance tool to create your emergency savings plan; otherwise, you can contact your local Iowa State University Extension and Outreach Financial Educator for a free, confidential, 1:1 Financial Consultation!

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Talking with Children about Money

Guest blogger Carol Ehlers is a Human Sciences Specialist with Iowa State University Extension and Outreach.

Wondering about the right time to talk to your kids about money? Children learn about money from many sources. Long before they enter school, they see adults using money and buying things. They see thousands of commercials each year. Like it or not, money is a part of your preschooler’s life.

What children witness affects their attitudes and how they value money. Some of these beliefs will help them as adult consumers and some will not. For example, they might get the message that saving is important or they might not.

As a parent or guardian, you will not be the only influence on what your child learns about using money. But when you daily reflect on basic lessons about money, you increase the chance that your child’s values will be similar to yours.

Simple activities and other resources, which are parent and child tested, can give ideas for:

  • Teaching how money works and what it can do;
  • Talking about how your family uses money; and
  • Modeling good money management.

Here are some tips and ideas for parents to use with their preschoolers to begin increasing their money management skills:

  • Encourage play that helps preschoolers think about money. This helps children learn about daily consumer choices. For example, play restaurant, supermarket, post office, bank, gas station or car wash.
  • Use games to help your child identify coins and values. Ask the preschooler to help you count out the money as you purchase items together.
  • Talk about work. Preschoolers can learn that some family members go to work to earn money for family needs such as food, clothes and the home. Preschoolers can learn that other family members work at home so that the family does not have to buy some good and services like laundry, cooking and yard work.
  • Share information. Talk with your child about how money is earned, paying for expenses and saving money. A good gift for a preschoolers to start learning this concept is a three part container with slots that are labeled SAVE, SPEND, And GIVE. There are some great examples on the internet.
Carol Ehlers

Money as You Grow, from the CFPB (Consumer Financial Protection Bureau) offers wonderful research-based guidance and financial learning activities for parents and caregivers of young children, and older children too.

The FDIC provides a range of resources for consumers, including free parent guides for four different age groups, including Pre-K through Grade 2, Grades 3-5, Grades 6-8, and Grades 9-12. Their page also features podcasts and games. (The parent guides are two-thirds of the way down the page).

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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It’s More Than Who You Know

A friend was visiting with a member of her family during a recent gathering.  They told my friend about a job opening at their workplace.  It was a remote job…a work from home opportunity with good pay and benefits. The next day, my friend sent in her resume, and two days later she had an interview.

In the past month I have: referred a couple of friends to job openings I knew about; received a phone call regarding someone who used me as a reference when they applied for a job; and met with a graduate of the Remote Work Certificate Course to help her prepare for an interview.

In the Remote Work Certificate course, offered through Iowa State University Extension and Outreach, many strategies are taught to build up your connections, because connections increase your chance of landing a good job. One of those strategies is social media, which can reach a lot of people with little time or effort. The most fruitful connections, however, will most likely be your direct personal connections.  You do not get referred if you do not connect with someone in a way that makes them trust you enough to refer you. Personally, in every job I’ve had except my first job, I had a personal connection that made the interview possible. Connections matter!

Important reminder: while the connections help you find the opportunities, and may help you land the interview, you still have to do your homework and work hard in preparing for the interview.

If you have a thirst for knowledge, know your strengths and want to work on them, and are thinking about getting into the remote workforce, check out the Remote Work Certificate course.  The next class begins January 4…application deadline is December 29.

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Thanks Giving: Give Wisely and Deduct

The Thanksgiving holiday is a time to stop and really notice how much we have to be thankful for. Many people take that gratitude a step further by sharing from what we have; they take their “thanks” and turn it toward “giving” to worthy charities this time of year. The arrival of “Giving Tuesday” next week also prompts people to give.

An article from the Iowa Attorney General’s office this week (see item 5 in the article) reminds us of steps to ensure we give wisely. Careless gifts may end up in the hands of criminals OR of organizations that do not use funds wisely. One way to make sure your money is used well for the cause you care about is to give to a local organization that has a good reputation. When giving to national organizations, you can make sure they are well-managed by checking one or more of these reputable charity rating sites: BBB Wise Giving AllianceCharity NavigatorCharityWatch, and GuideStar. The article offers more suggestions as well.

Another way to give wisely is to take the tax deduction for which you are eligible! Some people may say, “I don’t give to charity just for tax purposes – I give because I care!” That’s great. But if you take the tax deduction, and it reduces your tax bill (or increases your refund), then you have MORE money to give! Now that is wise giving!

The tax code allows us to deduct (subtract) our charitable gifts from our income before the tax is calculated. The government created that deduction to encourage us to give. By taking the deduction, and potentially having more to give, we are contributing to the valuable American habit of supporting worthwhile causes. There are two ways to deduct your charitable contributions:

  1. By “Itemizing” your deductions on Schedule A of your tax return. This is great for people who have enough deductions to be higher than the “standard” deduction allowed according to family type. For a single individual, that standard deduction is $12,550; for a married couple, it’s $25,100. Your tax preparer can help you know if this is advantageous for you.
    Good news! Even if you are better off with the standard deduction, a new law lets you deduct some 2021 giving anyway!
  2. Thanks to some of the COVID-relief legislation passed in 2020 and 2021, taxpayers can take a deduction for charitable contributions in 2021 even if they don’t itemize deductions! An individual tax filer can deduct up to $300 of monetary contributions to qualifying charities; for married couples filing jointly, that figure is $600.

In the midst of your Thanksgiving celebration, I encourage you to think about any charitable giving you might want to do, and then when you make the gift(s), be sure to keep the receipt for tax purposes! Plan now for #GivingTuesday and beyond!

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Confused about recent Federal Student Loan changes? Look no further!

If the Federal Student Loan changes over the past 18 months weren’t confusing enough, the U.S. Department of Education recently announced several more that may leave you wondering how you are affected this time around. The original COVID-19 Emergency Relief measures are tentatively set to expire on January 31, 2022, but the new provisions are either permanent, expire on October 31, 2022, and/or impact a smaller group of borrowers:

  • On August 20, the U.S. Department of Education announced that eligible Servicemembers would automatically, and retroactively, receive a 0% interest-rate benefit if they deployed to areas qualifying for imminent danger or hostile fire pay. This is not a new benefit; however, Servicemembers previously needed to submit a form, with supporting documentation, to find out if their loans and deployment qualified for the 0% interest waiver. 
  • Several updates have been made over the past few months regarding Federal Student Loan Servicers. PHEAA (FedLoan Servicing), Granite State, and Navient will no longer service U.S Dept of Ed-owned loans when their contract expires. Current borrowers will receive numerous notifications throughout the loan transfer process. Watch for those notifications: be sure to save the information or respond as requested.
  • The often-troubled Public Service Loan Forgiveness (PSLF) Program is receiving a giant makeover. Some of the provisions are temporary, while some remain unchanged. Regardless, these changes are significant and remain in effect until October 31, 2022. 

Are you still unsure of how these changes affect you? Contact an Iowa State University Extension and Outreach Financial Educator today! 

The information provided is educational in nature to help you make your own informed decisions and is not intended to substitute for professional advice or serve as an endorsement of any financial product or service. Consult with licensed professionals prior to implementing any of the information provided to determine the course of action is best for you. 

Ryan Stuart is a Human Sciences Specialist, Family Wellbeing, with Iowa State University Extension and Outreach. Ryan will be joining the regular blog team soon, so watch for more posts from him.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Getting a Leg Up

 

Next week, it will be 2 years since I took the Remote Work Certificate Course. It was not until I took this class that I realized that I have been working in a REMOTE job for more than 20 years now…meaning that I work from a remote site away from my employer’s headquarter.  As a specialist working for Iowa State University Extension and Outreach, I am house in a county office and serve multiple regions, coming to the ISU campus only three or four times a year.  We had been ZOOMing long before COVID hit, working, meeting, teach and hosting educational programs statewide and beyond.

It turns out that more than half of all U.S. job are remote work.  I was surprised to learn that there are more workers over the age of 40 than under 40 working remotely…I thought remote work would mostly appeal to the younger generation. In reality, 86% of the US workforce WANTS to work from home. The bad news is…currently only 3% of NEW job posts are transparently advertised as remote work.  It is for this reason that Iowa State University Extension and Outreach offers the Remote Work Certificate Course.  At the end of the month-long course, participants can schedule time with a career coach for assistance in creating goals, identifying jobs, working through a checklist, creating an online presence, and identifying networking opportunities.

There are plenty of reason why someone would want to work from home:

  • Employees can save more than $7000 per year in employment related expenses.  With the rising cost of gas, I predict that number to rise even more.
  • The opportunity for career advancement. Women make up 42% of the leadership in remote companies.
  • Professionals with experience working remotely are 63% more likely to earn $100,000/year than those that have never worked remotely…making it worth your time to learn the skills needed to work remotely.
  • 96% of U.S. employees NEED some flex in their current job because of aging parents or the needs of small children.

For more information about the Remote Work Certificate Course, visit our website. The next class begins the first Monday of next month and registration ends soon, so register now.

~Brenda

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Negotiating For Remote Work

Is Remote Work for You? 

Do you feel limited by the lack of career opportunities in your rural community? Are your skills being underutilized in your current position? Are the only job opportunities miles away from your hometown? Remote work or telecommuting allows you to work from anywhere without leaving your community! Register before July 28 to participate in the August Remote Work Certificate course. The course begins August 2.

I participated in the Remote Work Certificate course in November of 2019 because the idea of not having to travel for work in the winter appealed to me. A year later, Iowa State University Extension and Outreach became an affiliate member of the Remote Online Initiative of Utah State University…all before we fully knew the impact COVID was going to have on Iowa.

Remote work is challenging. Team work is especially difficult when teams are not in the same physical location. It affects communication, brainstorming, and problem-solving and Supervisors need to adjust how they manage their remote teams. To date, 18 Human Sciences Extension and Outreach specialists at Iowa State University have completed this professional development course, assisting with their transition to a remote workplace. The educational programming in Family Life, Nutrition and Finance did not slow when we were all sent home to work.

With approximately a fourth of the FY20 program year affected by COVID-19 and the Derecho, Human Sciences Extension and Outreach provided educational information and programs in nutrition and wellness, family life, and family finance across the state, resulting in over 93,000 direct contacts. 5,284 participants attended online mental health/stress related offerings.

Nationwide, the drive to get employees back into offices is clashing with workers who’ve embraced remote work as the new normal. The pandemic may be winding down, but that does not mean all will return to full-time commuting and packed office buildings. The greatest accidental experiment in the history of labor has lessons to teach us about productivity, flexibility, and even reversing the brain drain.

Currently, employers are facing pressure to adjust their workplace policies, if just to reflect shifting attitudes toward remote work among other tech giants. There has never been a more opportune time to negotiate remote or flexible work arrangements with your boss. In this online workshop, Dr. Paul Hill, Extension professor with Utah State University, will present the evidence-based steps to help you prepare for successful negotiation for remote or flexible work arrangements with your boss. Register to join Dr. Hill on Wednesday, July 21 at 1 PM CDT for this free webinar at Negotiating Your Remote Work Arrangements Tickets, Wed, Jul 21, 2021 at 12:00 PM | Eventbrite.

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Spring! Money?

This clump of allium is always a happy surprise later in spring.

The other day, a friend of mine posted a picture of crocuses blooming in her yard. That’s on top of a string of beautiful weather that we Iowans have been delighting in. It’s a good reminder for all of us that many of the best things in life are completely independent of money.

Most people have days (or weeks or months) when money is tight, or money decisions are overwhelming, or it’s clear that you will need to choose to do without something that you normally spend money on, When those days occur, let’s all remind ourselves of the crocuses, or the greening grass, or the beautiful sunset, or the smiles and hugs of our children.

Money does matter. But it is never the most important thing. It is encouraging to remember that.

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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