By Tamenia Jourdan/reporter
Budgeting, saving and making spending plans highlighted a presentation Oct. 30 by NE academic advisor Amy Reece.
Before the speech, she quizzed students on their knowledge on saving. She gave a post-test after the speech, and students scored higher on the post-test, she said.
“Sometimes you’ll get lucky, but those chances grow slimmer if you don’t know what you’re getting into,” she said.
Knowing resources is the basis of a good plan. A spending plan is beneficial, Reece said, because it helps satisfy financial wants and needs, provides a system to match income and expenses, helps avoid fees and helps reach life goals.
“Your expected income for the time period and your expected expenses for the time period are two key parts of a spending plan,” she said.
The most common mistake in budgeting is forgetting to save, Reece said.
“I save first, give to oneself, then I pay bills,” she said.
Investing for short-term and long-term goals is important, she said, and two common mistakes are forgetting to plan for irregular expenses and not including money for pleasure spending.
When expenses outweigh income, one has two choices: either provide more income or cut back on spending.
“Evaluate your needs versus your wants in relation to your personal values,” she said.
Using the “Step Down Spending Method” helps choose what expenses to cut and how much.
“A person identifies where his or her spending is, and he or she then decides how many levels or steps ‘down’ he or she is willing to take,” she said.
NE student Steven Plummer said he already knew how hard it is to save and budget but realized that it’s more important than he thought.
“You have to know your spending needs,” he said. “I tend to spend at times, which is normal for me. This has helped me to become more wise on what to spend, and I have to focus on my needs instead of wants.”
Reece ended with a group activity. She put students into pairs while giving each group a chart with different categories and a certain amount of coins. The goal was to take care of as many expenses using the coins that symbolized income. Each group had a different amount of coins.
“Everyone’s financial situation is different, and you still have to budget and plan properly,” Reece said.
