Iowans say budgets are important but sticking to them proves to be difficult
DES MOINES, IA (January 29, 2015) — Many Iowans believe constructing and maintaining a household budget is important but adhering to that budget is another story, according to a survey conducted by the Iowa Credit Union League.
The statewide survey of more than 1,100 Iowa credit union members and consumers showed that 73 percent of respondents say having a budget is very important, while only 2 percent say it is not. However, less than 10 percent of those respondents say they always stick to their budget, citing unexpected expenses as the main culprit for knocking them and their family off track.
“To budget in a way that can create wealth and stability for you and your family, you have to make a commitment,” said Jaimie Miller, Executive Director of the Iowa Credit Union Foundation. “Don’t be afraid to ask for help from your credit union. Many offer programs, classes and tools to help budget, save for a significant investment, such as a car or a home, and offer financial counseling.”
More than 67 percent of respondents said they usually stick to their budget, 18 percent sometimes do and more than 5 percent never do. Some reasons, other than unexpected expenses, include income fluctuation, poor planning, not having enough funds to pay monthly bills and fluctuating food costs.
According to the United States Department of Agriculture (USDA), five years ago a family of four spent a national average of $185 a week on food. By the end of 2014, that was up to more than $206, about an 11 percent increase. At the same time, income levels for the same group increased about 5 percent.
“Nationally, incomes are not keeping up with costs of living. Many people in Iowa are feeling it too,” Miller said. “To combat this, look for some areas you may be able to cut back, such as eating out and cable television. These things add up quickly and can derail your budget in no time.”
Additional tips to stick to a family budget:
- Set realistic goals. Setting a budget too tight only sets you up for failure. Be realistic when planning and make changes when necessary.
- Have a plan for every dollar. Create a weekly menu prior to shopping and only purchase the necessary ingredients. Know the cost of gas and how many gallons you use each month. Write down your family’s total monthly net income, list all monthly expenses and then subtract them from your monthly income. Writing the information down and having a plan will help to see where money needs to go.
- Make room for error. The ICUL survey shows it’s nearly impossible to stick to a budget 100 percent of the time. Re-evaluate each month and move your money around as necessary. Create a miscellaneous category for extra and unexpected expenses.
- Look to a credit union for help. Credit unions are member-owned, not-for-profit cooperatives, which enables them to routinely have lower interest rates on loans and competitive rates on savings accounts. Credit unions continue to receive the highest marks in the financial services sector for customer service and trust. Some of that trust can be attributed to credit unions regularly offering financial tools and educational opportunities for their members.
- Be creative. For example, the Iowa Credit Union Foundation – celebrating its 20th anniversary in 2015 – leads the largest and most comprehensive matched savings program in Iowa. It is available for families and individuals who meet income-based criteria. The matched savings accounts, available at participating Iowa credit unions, help qualified individuals and families purchase an asset, such as a home, higher education or an automobile for work, which helps toward long-term financial stability. A program such as this could help boost extra savings efforts written into any family’s annual budget. Click here to learn more about this program and browse ICUF’s other financial literacy resources.
To learn more about credit unions or to find a credit union to join, visit: http://www.iowacreditunions.com.
About the Iowa Credit Union League
The Iowa Credit Union League is the trade association that represents the interests of Iowa credit unions and their more than one million members. Credit unions are not-for-profit, financial cooperatives owned and operated by their members. Iowans use their credit union membership to receive higher interest rates on savings and lower interest rates on loans. For more information on ICUL and Iowa credit unions, visit www.IowaCreditUnions.com. Follow ICUL on Twitter at www.twitter.com/icul or on Facebook at www.facebook.com/iowacreditunions.To learn more about credit unions, visit www.ASmarterChoice.org
About the Iowa Credit Union Foundation
Founded in 1995 as the philanthropic arm of the Iowa Credit Union League, the Iowa Credit Union Foundation’s (ICUF) primary focus is to eliminate poverty in the state of Iowa. ICUF seeks to carry out its mission to help Iowans build wealth, responsibility and independence through its various programs, grants and scholarships. For more information, visit www.IowaCreditUnionFoundation.org.