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New Mexico State University

New Mexico State University

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Money Problems Create Stress for Many Families

LAS CRUCES -- In these days of a healthy national economy, not all is as rosy as it might be, said a New Mexico State University consumer education specialist.

Many families are experiencing financial stress because their income is not equal to their expenditures, said Susan Wright with NMSU's Cooperative Extension Service. Short tempers, arguments and even illness can result from the stress that accompanies difficulties with the family budget.

"Sources of financial stress are familiar to many of us ? fear of running short of money before the end of the month, carrying too much debt, reduced employment or unemployment, no funds to cover medical emergencies and unexpected home or car repairs," Wright said. "Lack of knowledge of how to use available income also can be a major source of stress."

One of the best ways to relieve financial stress is to plan ahead. The first step should be to plan and follow a budget to make the best use of available money. "Being willing to follow a budget and make the lifestyle changes may be the key for relief from financial stress. Learning to manage family money wisely to avoid money problems takes determination," Wright said.

Savings should be a key item in a household budget. Set up a special bank account for savings. Then, put money into it on a regular and frequent basis.

"Determine how much you can afford to deposit and pay yourself first," Wright said. "That money will be available for emergencies or for special purchases."

To start a budget, write down all sources of family income. Check pay stubs to determine how much take-home pay is received ? the net amount. "Do not use the gross income amount unless you include taxes and other items taken out of each check as specific items in your budget," she advised. "Then decide how each paycheck will be used before any of it is spent."

Budget categories should include food, housing, transportation, clothing, savings, health and contributions and gifts. Any other items the family spends money on regularly also should be included. Then, estimate how much money is spent on each category each month. The total should equal the amount of the family's income. If it is more, adjust the spending estimates to equal the income.

"During the first month of your budget, keep tabs on how much you actually spend for each category," Wright said. "Try to stay within the estimated amounts, but if more is needed for one area and less for another, adjust the categories."

If more money is spent in every area, adjustments may be required for a while to stay within the budget, she said.

Before making any purchase outside the budget, consider what to give up from the budget. "Is it worth the sacrifice? Can you afford it? After all, once you spend a dollar, it is gone and cannot be used for something you really need," Wright said.