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Time, Energy, and Money: Managing Family Resources

Get an Education

The best first step you’ll ever make in

achieving your financial goals is to get an

education. Stay in school. If at all possible,

strive to attain an academic degree. In

2005, college graduates with teaching and

liberal arts degrees earned an average of

$44,350 a year. People with advanced

degrees earned an average of $74,602

compared to those with a bachelor’s

degree who averaged $51,286. People with

a high school diploma averaged $18,734.

(U.S. Census Bureau, 2005a).

Make and Stick to a Budget

Many people don’t take the time to

budget their financial resources. Others

feel a budget is too “confining” or

“controlling.” The exact opposite is true.

Budgets put families in control of their

money. If a large company were foolish

enough to operate without a budget—

without controls on spending and without

accountability measures—it would not

stay in business very long. Operating

without a budget is just as foolish for

families; yet less than 30% of families

follow a written monthly budget to

manage household finances (Statistics,

2008). While the number of bankruptcies

decreased 61% in the 12 month period

ending March 31, 2007, it is not really

representative of the financial problems of

American families (Bankruptcy, 2007).

The number of family bankruptcies

increased 12.8% in the previous 12 month

period ending March 31, 2006, prior to

the Bankruptcy Abuse Prevention and

Consumer Protection Act of 2005

(Bankruptcy, 2006). One of the simplest

and best ways to avoid bankruptcy is to

follow a budget.

A personal budget is a financial plan

setting limits on the amount of money a

family can spend on a category of

expenses in a given month. A good budget

accounts for expected income,

outstanding debt to be retired, and

retirement savings. It also includes an

emergency fund.

Many people have no clear idea of how

they spend a good portion of their money.

They don’t keep track of their

spontaneous ATM withdrawals, and then

are shocked to find their checking

accounts drained. They don’t understand

why they had a wallet full of money on

payday, but an empty wallet by Monday

morning. When people don’t track their

One of the best ways to achieve your financial

goals is by getting a college education.

Image from BigstockPhoto.com / yakup