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Division of Agricultural Sciences and Natural Resources

Building a strong financial foundation

Many families keep a sharp eye on the bottom line, carefully watching every dollar that flows into the household and each cent that goes out. Having the right set of key financial tools can make that job a lot easier.

“Having the right tools to manage your money will make the work easier to complete,” said Cindy Clampet, Oklahoma State University Cooperative Extension assistant state specialist, family resource management.

Here are six important tools that will help put families on the path to financial success.

Create a budget. A budget is a plan for spending the family’s money and provides a way to account for every dollar that goes out and comes into the household.

Develop a tracking system. Once a budget is established, families should track how their money is spent. Tracking also allows the family to compare their records to the bank’s records to ensure there are no mistakes.

“Lots of people use the checking account register to track their spending, but an app on your computer, phone or other device will work, too,” Clampet said.

Establish an emergency savings account. Life happens, right? An emergency fund helps families better handle unexpected events. The money in this account should only be used in true emergencies such as a job loss or major illness.

“Families should aim for saving 3 to 6 months of their current take home pay in an emergency fund,” Clampet said. “It may take a long time to build up that amount, but you’ll be thankful for the cushion in a true emergency.”

Set up a reserve savings account. This account is used to cover periodic expenses such as insurance, taxes, car tags, birthday gifts, vacations, school expenses and other obligations that do not occur monthly. For instance, if the expense happens once a year, deposit 1/12 of the total amount into this account each month so the money will be available when the payment is due.

Get a credit card. A credit card gives families some flexibility in making large purchases. However, there are usually extra fees and charges added if the balance is not paid by the due date or if the minimum monthly payment is not made on time, so credit cards should be used responsibly.

Request a credit report. A credit report is a picture of a person’s history of borrowing and repaying money. A person’s credit score is based on information in the credit report and used to determine everything from whether a person is eligible for a new car loan to renting an apartment to getting a job.

Everyone is eligible to receive one free credit report per year from each of the three credit reporting agencies. Visit www.annualcreditreport.com for more information.

For more information on personal money management strategies, contact the nearest county Extension office.

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REPORTER/MEDIA CONTACT:
Leilana McKindra
Communications Specialist
Agricultural Communications Services
158 Agriculture North
Oklahoma State University
Stillwater, OK 74078
Phone: 405-744-6792
Fax: 405-744-5739
Email: leilana.mckindra@okstate.edu

Oklahoma State University - Stillwater, OK 74078
405.744.5000