Tag Archives: budgeting

Sep 27 2025

SHOULD YOU REFRESH YOUR BUDGET?

Whether you have been budgeting for a month, a year, or longer, a regular review of your spending plan is vital.  Several situations may indicate a need for a revised budget; these include:

  • Worrying about money emergencies. Be sure your budget includes savings to create an emergency fund for unexpected expenses.
  • Using the same budget each month. Spending needs are likely to change from month to month, as a result slight changes might be necessary.
  • Not tracking expenses. A record of your actual spending is vital for budgeting success. 
  • Overspending in a budget category. Be sure your plan is realistic and helps you avoid unneeded spending.
  • Avoiding a “sharing” category. The SPEND, SAVE, SHARE framework is a recommended approach. Giving to church, charities, and worthy causes contributes to living a fulfilled life and contentment.
  • A major change in income. A raise should not result in lifestyle inflation in which you significantly expand your spending. Or, a loss of job can result in an extensive budget adjustment along with use of emergency funds. Your emphasis will likely be on spending for food, utilities, shelter and transportation.
  • Not considering inflation. Most people have been affected by rising costs of many items requiring an adjustment in budgeted amounts.
  • Overlooking annual and seasonal expenses. Planning for holidays, vacations, back-to-school expenses, and semiannual auto insurance requires setting aside an amount each month for those items. Not doing so may result in increased debt or using your emergency fund for something that is not an emergency.
  • Planning for funds from paid off debt. As you pay off credit cards and loans, those monthly payments can now be used to expand your emergency fund and other savings goals.
  • Not coordinating budget items with savings goals. If your spending and saving activities are not helping you achieve your financial goals, a revised budget may be needed.

For additional information on refreshing your budget, click here.

Teaching Suggestions

  • Have students talk to others to learn actions used for successful budgeting.
  • Have students research budgeting apps that could help them better plan their money management activities.

Discussion Questions 

  1. What features of an app might be helpful for successful budgeting activities?
  2. Describe actions that might be taken when a person needs to revise their budget.   
Aug 16 2025

A.I. PROMPTS FOR IMPROVED FINANCIAL DECISIONS

Artificial intelligence (AI) is influencing every aspect of life and learning.  A vital skill when using AI is creating prompts to obtain valid information for your specific life situation. When creating an AI prompt, be sure to:

  • specify desired length, style, format, reference dates, reading level.
  • identify intended use, purpose, and audience.
  • begin with action verbs: create, design, explain, compare, summarize
  • split complex requests into subtasks and subproblems.
  • include examples and background information for context.
  • avoid complicated or unusual words.
  • submit follow-up requests to verify, clarify, and expand results.
  • ask for references from resources consulted.

Some suggested AI prompts to guide your financial decisions include:

Budgeting: “Help me create a monthly budget. My monthly take-home pay is [amount] with these fixed expenses [list items, amounts]. I have monthly variable expenses of approximately [amount]. I plan to save at least [amount] each month for [financial goal] in [number] years. Suggest budget categories and amounts.”  

“My variable income averages about [amount] each month. I have fixed monthly expenses of [amount].  What actions are suggested to plan for taxes, savings, and variable expenses?”

Banking Services: “Suggest a bank or credit union that minimizes fees and provides appropriate payment, savings, and loan services. I am a [describe current life situation] with a monthly income of [amount].”

Taxes: “I plan to move to [state/country], my current annual income is [amount]. What factors should I consider related to potential tax obligations in this new location?”

Wise Credit Use: “Each month, I use my credit card for several purchases, and always pay off the balance. How will this affect my credit score? What additional actions would help me build my credit score?” 

Insurance: “I’m currently [age] and [marital status] with [number] dependents. My income is [amount]. What amount of life and disability insurance should I consider? What would be an appropriate amount to pay for this coverage?”

“I currently drive a [year, make, model] vehicle, and am paying [amount] a year for auto insurance. What actions should I consider to review my coverage and reduce my insurance payment?”

Housing:  “My monthly income is [amount], I pay [amount] in monthly rent, and have [amount] saved for a down payment. How should I determine if I can afford closing costs and long-term homeownership expenses?“

Buying a Car: “I’m considering a used [year, make, model]. I’m able to afford [amount] for this purchase. What factors should I consider before buying this vehicle?”

Investing:  “I’m [age] with an annual income of [amount]. I’ve saved [amount] in an emergency fund. Now I would like to start investing for [goal] to be achieved in [number of years]. What investments should I consider?” 

Retirement Planning: “I’m [age], self-employed, and earn [amount] a year. What options do I have available to save for retirement?”

Wise Shopping:  “I’m planning to buy [item, model, other details] with a budget of [amount]. What actions would result in getting the best deal, strong customer service, and a good warranty?

Avoiding Consumer Fraud:  “When researching and buying [describe product or service] online, what actions should be taken to determine if an offer is genuine and to avoid being scammed?”

Wealth Creation:  “Based on my current key skills of [list 3-5 strongest abilities],  suggest three unique actions to use my existing skills to increase my income. For each action, suggest specific steps to implement the action and estimate the potential financial benefit.”

Despite every effort to obtain valid AI responses, be aware of these potential drawbacks:

  • Responses may possess bias and include flawed logic.
  • Incorrect facts or results not based on current financial data.
  • Inaccurate calculations and erroneous predictions.

For additional information on AI prompts for personal finance, go to:

Link #1

Link #2

Link #3

Link #4

Teaching Suggestions

  • Have students create and use an AI prompt to obtain guidance for a financial decision. Compare the response received with other sources (online search, information from friends or relatives).
  • Have students talk to others to obtain ideas on how AI is being used for financial decisions.

Discussion Questions 

  1. What features of AI might be most useful to help people improve their financial planning activities?
  2. Describe actions a person might take to evaluate the validity of an AI response.   
Mar 1 2025

USE THE NUDGE THEORY TO CUT SPENDING

  • Useless spending can crush your savings goals.
  • The easier it is to spend money, the more likely you will spend it. 
  • Making things difficult can actually be a good thing.
  • Small changes can result in significant improvements over time.

These principles make up the nudge theory, which suggests that behavior can be shaped through small, subtle changes. Making spending harder can discourage spending and increase your financial awareness to achieve savings goals.

Adding friction to your spending activities can force you to make more deliberate purchases. To nudge your savings by reducing spending, consider the following actions:

  • Only pay cash for several weeks or months. The inconvenience of obtaining cash and keeping track of it for payments can reduce spending on frivolous items. Seeing cash in your hand can also make you more aware of its value.
  • To be more disciplined, write out a list of purchases on paper or using a notes app. While this can be annoying, it can result in immediately having more money for savings.
  • Account for all spending to avoid wasting money on silly and useless things such as empty calories and products you may not use.
  • Before making a credit card purchase, check your current account balance to help deter unneeded purchases and increased debt. 

These strategies are useful for those who are concerned about their spending and who live paycheck to paycheck. While companies make every effort to remove barriers for your spending, don’t make it simple for your money to leave you…put up obstacles.

This approach may not be for everyone. However, taking some action might save you $1,000 a year, which over ten years could be worth over $15,000 when the money is placed in an index fund or other stable investment.

For additional information on the nudge theory, click here.

Teaching Suggestions

  • Have students talk to others to obtain suggested actions for controlling their spending.
  • Have students create a podcast to communicate actions to control spending.

Discussion Questions 

  1. What aspects of the nudge theory might be useful for your money management activities?
  2. Describe actions a person might take to place barriers on their spending.   

Feb 15 2025

Plan ahead for the New Year

For many, December means spending lots of money on presents, food, travel, and other things to get you through the end of the year. And after we stretch our wallets, January’s often for taking stock and planning for the year to come.

If that’s true for you, here are some things to hopefully save you time as you transition from holiday festivities to financial goals in the New Year.

Are you:

Looking for more? The FTC’s consumer.gov site has tools to help you in the New Year and beyond. Get the basics on these and other topics like avoiding scams and identity theft at consumer.gov in English, Spanish, Chinese (Simplified), Korean, and Vietnamese. You’ll also find videos and free, one-page handouts to share in your community. 

For more information, click here.

Teaching Suggestions:

  • Ask students to get their free credit reports from Equifax, Experian, and TransUnion, and sign up for free credit monitoring with Credit Sesame or Credit Karma.
  • Ask students to list the main steps in creating a budget.  What are commonly recommended qualities of a successful budget?

Discussion Questions:

  1.  Why is it important to check your credit reports regularly?
  2.  What are the most frequent reasons for indebtedness?
  3.  What are common danger signals of potential debt problems?
Jun 10 2023

BUDGETING AND SAVING WITH “CASH STUFFING”

Before credit cards, debit cards, and apps, people used budget envelopes to see where their money was going. Today, a variation called cash stuffing is being used by many, especially young people who became familiar with the system through online videos. This system is helping people cope with inflation and other financial difficulties by controlling their spending.

The main benefits of cash stuffing are: (1) increased spending awareness; (2) reduced credit card use to prevent debt; (3) controlled spending – once cash is gone for a budget item, you can’t spend any more – which can result in higher amounts for saving; (4) improved budgeting for holiday spending, birthday gifts, and children’s school activities; and (5) decreased stress with a greater sense of financial control.

Possible drawbacks of cash stuffing include: (1) the danger of lost or stolen cash; (2) the time needed to withdraw, sort, and organize cash into envelopes; (3) the temptation to overspend by moving cash to other budget items; and (4) lost interest by not having the money in a bank account.

When using cash stuffing, consider these steps:

1. Allocate your income, based on recent spending patterns, into budget categories, including fixed expenses, variable expenses, debt repayment, and savings.  

2. Label envelopes, folders, or a pocket portfolio with your spending categories.

3. Each payday, obtain cash to place into each category.

4. As you spend money for each category, be sure the envelope doesn’t become empty before the end of the month.

5. Repeat this process each month; adjust amounts as your needs and spending changes.

Paying cash for everything is often not practical, such as online payments for rent, utilities, or other items. Instead, consider a hybrid or blended method, in which you use cash stuffing for only some spending areas. This would allow you to make online payments and earn interest on money on deposit while controlling spending for some budget categories. Also consider budgeting apps that simulate envelopes so you can visually see how your money is being spent.

Other items to note when using cash stuffing:

  • Consider starting small, using the system for three or four budget items for which you would like to better control.
  • Be safe in keeping and carrying large amounts of cash. You might use slips of paper or play money (that you can buy online) in your budget envelopes, which will still give a tangible experience.
  • Search for “cash stuffing” online videos. These often feature colorful, personalized cash binders with compartments labeled for different categories — such as rent, food, savings and sinking funds. 
  • Make a commitment. Cash stuffing will not stop you from overspending. You must commit to only spending the amount you set. Use the system you create to be able to trust yourself.

For additional information on cash stuffing,

Link #1

Link #2

Teaching Suggestions

  • Have students talk to two or three others to learn about the budgeting systems they use to control their spending.
  • Have students create a visual (poster, slide presentation, or video) with suggestions for effective budgeting.

Discussion Questions 

  1. What benefits and difficulties are associated with cash stuffing (budget envelopes)?
  2. Describe actions a person might take to effectively use cash stuffing. 
Jul 3 2021

STIMULUS CHECKS USE

As a result of the economic difficulties during the COVID pandemic, many Americans received government stimulus checks. These payments were designed to minimize or avoid financial difficulties.  

Recipients of the first two stimulus checks used the majority of funds for daily living expenses with food and utilities as the top items. Those who received the third check had some significant changes in their use of the money.  An increased portion was used to pay off debt and for savings, including money set aside for an emergency fund. This trend indicated that many households experienced improved financial stability. However, among lower-income groups the third stimulus check was still needed for monthly bills and day-to-day essentials.  

People continue to be in need of a cash cushion. Financial advisors recommend using money from stimulus checks or tax refunds to pay off high-interest debt and for an increased savings account.  While many households have are better off than they’ve ever been and improving further, millions of others face ongoing financial hardship.  

For additional information on stimulus check use, click here.

Teaching Suggestions

  • Have students talk to those who received stimulus checks to obtain information how the money was used.
  • Have students describe a research system that might be used to determine the spending, saving, investing, and credit use habits of various groups of consumers.

Discussion Questions 

  1. What are reasons people are unable or unwilling to practice wise money management?
  2. Describe actions that might be taken to prepare for unexpected financial difficulties.
Feb 20 2021

CREATIVE BUDGETING METHODS

While keeping a close eye on spending is vital for financial security, few people enjoy doing so.  Several creative approaches for effective budgeting and money management are available.

  1. The 70% Rule ­­­­is percentage-based with 70 percent of income for necessary expenses. Followed by 20 percent going into savings by using automated direct deposit. The other 10 percent is for retirement and investing for future financial security. The 70% Rule is useful for those with saving as a priority, and want a simple budgeting method.
  2. The 50/30/20 Rule is a variation of the 70% Rule, with three categories. First, 50 percent of your income goes toward necessities. Then, 20 percent is for financial goals, such retirement or paying off debt. The remaining 30 percent can be spent as desired. This approach may not work for many people, but can be a good starting point for successful money management.
  3. Budget by Paycheck uses a calendar to track income and expenses. Color code your paycheck, expenses, and extra money to assign a bill payment to a paycheck on a calendar. Any “extra” money should be given a “job,” such as savings, debt repayment, or fun. This approach is useful if you desire structure and like having a visual tool.
  4. Envelope Budgeting is a traditional method with labeled envelopes to identify expense categories. Cash for the budgeted amount is put into each envelope. You only spend the amount in an envelope, which provides strong control of your spending. Instead of cash, you may use a card or envelope to record the amount spent for each category to stay within your limit. Several budgeting apps are also available with visual envelopes to monitor spending.
  5. Gift-card Budgeting manages your money by dividing your spending into categories and loading the amount onto a phone gift card. This system is similar to traditional envelope budgeting. Determine the amounts for various spending and saving categories. Then, buy gift cards for each category, such as a food store card for groceries, which will limit your spending for each budget item. With gift cards on your phone, you will always have them with you and will know the balances. Buying gift cards at moola.com can result in special deals and bonuses.
  6. You Need a Budget (YNAB) is a software system and app featuring partner budgeting, goal tracking, personal support, and secure data. YNAB emphasizes these principles: every dollar is assigned a category; large expense items are broken into manageable amounts; budget flexibility when situations change; and planning for the future, without scrambling for today. The personalized support and online YNAB community discussions, included in the cost of the software, prepare you for successful budgeting on your own.
  7. Kakeibo, pronounced “kah-keh-boh” and translates as “household financial ledger,” is used in Japan to manage personal finances. This method emphasizes recording financial activities with physical writing (no apps or computer), and uses four categories: (1) needs, (2) wants, (3) culture, such as books and museum visits, and (4) unexpected, for medical expenses or car repairs. Then, you reflect on these questions: How much do I have available? How much would I like to save? How much am I spending? How can I improve? Kakeibo may not control your spending but it can make you more mindful of how you spend money.
  8. Zero-based Budgeting gives every dollar a specific task for spending, saving, or investing. This method encourages you to create a revised budget each month based on changes in income or expenses, which provides financial flexibility. This system may not be useful for people with irregular incomes.
  9. Value-based Budgeting involves allocating income based on importance (value) to you rather than budget categories. While some items need to be paid (housing, food), how much you spend on these items depends on how much you value them. If eating out is a priority, your food budget will be higher than for someone who eats mainly at home. This approach can help you stay within your budget since you created the spending plan based on personal preferences. Beware that saving for a goal might be a low priority but should probably receive stronger recognition.
  10. Pay Yourself First Budget is simple and emphasizes your financial future. Based on the amount earned, determine how much you want to save. The remaining amount is divided among necessary expenses and other spending.  The process can be awkward when a conflict exists between income available and a desire to save a large amount. Many people combine this method with other budget systems to ensure coverage of needed living costs.

Other actions that can make budgeting fun include:

  • Money Nicknames. By naming your bank accounts and budget categories with creative names can create a fun attitude and personalized connection for money management activities. Also, use a Sharpie to label your debit and credit cards with a name or a specific use, such as “Hey, bills only!” or “Treat yourself today.”
  • Bae Day involves setting aside a specific time, usually on payday, to review your budget and plan your spending. Bae, which stands for “before anything else,” involves a self-appointment to take action before anything else happens to your money. You can make Bae Day fun by dressing up for this self-care occasion, going to a special location, or playing favorite music.
  • Money Mate Date helps achieve accountability related to finances. Your Money Mate will keep you in line for financial activities. The relation can involve a quick call to make sure that monthly bills are paid, or an emergency text to avoid impulse buying.
  • Arts and Crafts. Create, or locate online, a poster to visually view progress on savings or debt reduction. Color in the poster little by little as you save or pay down student loans. Also consider using photos to represent budget categories or financial goals for more motivating money management activities.

 

For additional information on creative budgeting ideas, here are some links to click on:

Link #1

Link #2

Link #3

Link #4

Teaching Suggestions

  • Have students talk to others for information about budgeting actions that have been successful.
  • Have students create a video, poster, or other visual with ideas for creative budgeting activities.

Discussion Questions 

  1. What are reasons people are unable or unwilling to practice successful budgeting?
  2. Describe the actions a person might take for effective budgeting.
Jan 23 2021

Coping With the Corona Virus-Related Financial Stressors

KEY POINTS

  • Nearly half of U.S. adults have reported that their mental health has been negatively impacted due to worry and stress over the virus, according to a Kaiser Family Foundation poll.
  • A new NFCC survey finds situations that immensely exacerbate financial worries include not having enough savings, losing a job and the inability to pay debts.
  • Many large health insurance companies as well as Medicare have increased their capacity and coverage for telehealth visits with mental health providers.

Here are some tips from the mental health and financial experts on how best to cope with these common money stressors.

1. Not enough savings

If you find yourself struggling financially and have a limited emergency fund — or none at all — focus instead on what you can control. “First, carefully examine your expenses and reprioritize your spending. Cut out everything but the essentials , such as,  mortgage or rent, food, utilities and insurance,” said author and certified financial planner Carrie Schwab-Pomerantz, who is also president of the Charles Schwab Foundation. “If you’re unable to pay a bill, contact your creditors right away. They may be willing to negotiate a payment schedule or waive late fees.

2. Job loss

If you haven’t already, file for unemployment benefits immediately through your state’s program. There will likely be a lag time until you receive your first check.

  • Make sure you still have health insurance. You could switch to COBRA to receive the same coverage you had under your employer for the next 18 months, but you have to pay for it yourself at a considerably higher cost than you were paying as an employee. “Do some comparison-shopping.”
  • Consider other jobs that you may be able to pursue. Use your down time to learn a new skill or start that side-hustle. Education, health care, and technology companies are among some of the industries hiring remote workers right now.

3. Inability to pay your debts

Nearly half of U.S. adults currently have credit card debt and 13% of them are not paying anything at all or don’t have a plan on how to pay, according to a report by CreditCards.com. 

Consider temporarily paying only the minimum on mortgage/rent, car loans and student loans as well, said Schwab-Pomerantz, whose Schwab MoneyWise website has a list of resources to help during the Covid-19 crisis. More help could be available. You may be able to lower or suspend your mortgage payments for up to one year in some cases. Contact your lender.  If you’re having trouble paying your rent, talk to your landlord about your situation and your options. Some states and municipalities are providing eviction restrictions for impacted individuals. Many utilities and phone companies have stopped cutting off services for nonpayment. Call them.

For more information, click here.

Teaching Suggestions

  • Ask students how the corona virus has affected them, their relatives, or friends. What steps have they taken to minimize the effects of the corona virus?
  • List the steps to take if you don’t have enough emergency funds to get through this financial difficult period.

Discussion Questions

  1. How are millions of Americans coping with stress and anxiety as they deal with the fear and reality of death and disease due to the corona virus pandemic?
  2. Discuss the economic and emotional worries that are keeping American awake at night.
Jun 6 2020

Giving A 6-Year-Old A Debit Card to Teach Wise Spending…Really!!

Kids are no longer using a piggy bank to obtain financial responsibility. Instead, digital tools, such as debit cards and apps, are the basis for learning smart spending and wise money management.  Many of these products are prepaid cards that help kids track their spending, and also include customizable oversight features for parents.  Some available products include:

  • FamZoo (famzoo.com) makes use of parent-paid interest to encourage saving. Common users of the app are preteen and young teenagers, but may also be used for kids from preschool to college.
  • Greenlight (greenlightcard.com) allows parents to control the stores at which the debit card can be used. Greenlight plans to introduce an investing feature to move users to a higher level of financial literacy.
  • gohenry (gohenry.com) is an app for kids (ages 8 to 18), but may be used by younger children. The emphasis is on building money management confidence in a safe setting while learning to spend and save.
  • Current (current.com) is a custodial bank account aimed at teenagers. Parents may also open accounts for younger children.

These products allow parents to channel digital funds to their children to pay weekly allowances. Also, kids may divide their money into accounts for saving, spending, and donating to charity.  Most apps have a monthly fee, ranging from $3 to $5.

When using prepaid debit cards with children, consider the following:

  • Spend time talking about why the kids want to buy various items, and why certain household tasks earn money and others do not. Expand the Connect the discussion to talk about total family finances as well as money attitudes and values.
  • Allow freedom to make spending decisions to give kids experience at managing money, and to make mistakes from which they will learn.
  • Ask older kids to buy household items, even though they might be reimbursed. Buying shampoo, toothpaste, and snacks will prepare them for when they are on their own. Also consider billing them for monthly expenses, such as the cost of their cell phone.

For additional information on prepaid debit cards for kids, click here.

Teaching Suggestions

  • Have students conduct online research to evaluate apps that might be used by parents to teach their children smart spending and wise money management.
  • Have students talk to parents to obtain suggestions that might be used to teach wise money management to children.

Discussion Questions 

  1. What are the financial, social, and relational benefits of children learning smart spending and wise money management early in life?
  2. Describe some possible money management learning activities for children that do not involve the use of technology.
May 2 2020

Beware: Subscription Services

With growing numbers of video streaming services and product box programs, these subscriptions are becoming the newest budget buster. These seemingly small monthly charges add up, lowering a person’s ability to save along with a potential for increased debt. These ongoing financial commitments leave people with a lower percentage of free cash flow, or unencumbered income.

Subscription service spending is often overlooked especially when the payments are on auto pilot. A $4 or $8 monthly fee may not seem like much. However, research indicates that subscription services are an increasing financial burden as most people underestimate the amount. In one study, 84 percent of respondents estimated monthly spending on these services at about $80; the actual amount was over $110. In addition to video steaming services, people sign up for automatic monthly shipments of beer, wine, contact lenses, cosmetics, meal kits, pet food, razors, vitamins, and other products.

For additional information on subscription services, click here.

Teaching Suggestions

  • Have students survey several people to determine the types and amounts of subscription services being used.
  • Have students create a financial analysis for amounts saved over several years by reducing or eliminating subscription services.

Discussion Questions 

  1. What factors influence a person’s decision to use a subscription service?
  2. Describe suggested actions that a person might take to reduce or eliminate subscription services.