This is an expensive time of year. In the next few weeks, we’ll spend money on groceries for the Thanksgiving feast, Christmas gifts and decorations, real estate taxes and car tags for those at the end of the alphabet. Can income taxes be far behind?

Money is a part of our life every day. What we wear, what we eat, where we live, and the fun things we do are only a few money related decisions we make. The way you spend or save money today will help determine what you have and whether you can pay your bills in six months, a year or many years from now.

For some people, having a million dollars wouldn’t be enough to satisfy their wants. Millions of other people manage to pay their bills, save for the future and enjoy life while still living within their income.

No one is born with natural money management skills. You might have learned some money management skills from your family, either by observing or someone actively giving you guidance. You also might have learned some money management skills at school or through life experiences. Developing money management skills takes time, practice, and patience.

Budgeting is a way to get the most out of your dollars. It is not just about saving money or being a tightwad or doing without. Budgeting is about deciding where your money will go and making a spending and savings plan to achieve your financial goals.


If you run out of money before all your expenses are paid each month, you are not alone. While people work hard to earn an income, they often do not work as hard at planning how income will be spent. There are steps you can take to make a budget work for you. The basic steps in budgeting include:

1. Get organized. Get your bills and financial records together. Have a designated spot where bills are placed when they arrive. If it is a paper bill, use a drawer, box, basket or file. If it is an electronic notice, consider creating an email account just for bills. Review your bills regularly and note the date the bill should be paid. If you are going to mail the payment, the date noted should be four or five days before the due date (to allow the payment to arrive before the due date and avoid a late fee). If you are going to pay electronically, allow enough time for the payment to be received before the due date.

After paying a bill, mark it “paid” and put it in a large envelope, box or file marked “Paid bills.” Keep receipts for cash payment of bills in the same place.

2. Track spending. To get a realistic picture of how you spend your money, keep a folded sheet of paper or small notebook with you at all times to track all of the money you spend for at least a week. Tracking your spending for an entire month will help you learn even more.

3. Record spending. Record your spending on a budget expense worksheet, adding categories if necessary to fit your spending pattern.

4. Record all income. Make a list of your income from all sources. Include monthly income, but also don’t forget seasonal income, interest on financial accounts, income tax refunds, gifts and other sources of money coming into your household.

5. Compare expenses to income. If your expenses are more than your income, look for ways you can cut. Determine what expenses are absolutely necessary, such as housing, utilities and food. Decide which other expenses can be cut to meet the necessary expenses. Then, look for ways you can increase your income. Consider a combination of the two.

6. Make a budget (spending and savings plan) for next month. Fill in planned expenses and expected income on a sheet of paper or electronic budget form. Plan what bills and expenses will be paid out of each paycheck or other source of income, as well as how much of the income must be saved to pay expenses later in the month. As it is received, record income on income side of the sheet. As bills arrive, list them under expenses. Also record other monthly expenses if no bill is received (such as rent).

7. At the end of the month, subtract expenses from income and determine if you have stayed within your budget.

8. Review expenses and income to determine what needs to be changed. Do you need to cut some expenses or increase income? Were there any unplanned expenses that occurred this month? Did you include an amount for savings in your plan?

Don’t be discouraged. The first few months you try to follow your budget will be a learning experience. You might need to make changes in your budget. Remember, a budget is your plan for spending and saving your money to accomplish your goals. It helps you identify where your money goes and helps you plan how to use your money to get the things you need and want in life.

For more information, see the Essential Living Skills resource on money management from K-State Research and Extension at It includes helpful information on budgeting, banking and saving important records.

Linda K. Beech is Cottonwood District Extension agent for family and consumer sciences.