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Fatten Up That Piggy Bank: A Budget Guide for Every Income

Fatten Up That Piggy Bank A Budget Guide for Every Income [•9• BUDGET PLANS 3 ways to build a budget that works for you 50/20/30 Plan - C0 • Helps figure out how much to allacate to each area every month • Helps determine the order in which money can be allocated • Easy to follow because it splits everything into 3 categories 1 Fixed Costs No more than 50% of take-home pay Expenses that don't change month to month Bills and expenses Rent or Utilities Car payments mortgage payment Subscriptions Gym membership Netflix account Tip: When trying to make more room in a budget, trim from this area. Look for bills or subscriptions that could be reduced or canceled. 2 Financial Goals At least 20% of take-home pay Important payments or contributions to secure your financial foundation Important goals may include Paying down credit card debt Saving for retirement Building an emergency fund A down payment on a new home Tip: Automate savings contributions and debt payments. 3 Flexible Spending No more than 30% of take-home pay Day-to-day expenses that vary Eating out Groccries Shopping Hobbies Entertainment Gas Tip: To determine flex-spending amcunt, first subtract fixed casts and financial 3oal contributions from take-home pay. - Custom Budget TIT||| Step 1 Include everyday bills Make a list of alI financial obligations Rent Utilities Flexible expenses Food Clothing Step 2 Add annual and semi-annual Car registration obligations to list Emissions testing Step 3 Add personal spending categories to the list Christmas gifts Birthday gifts Step 4 Assign a percentage of take-home pay to savings Write amount as a dollar figure at top of spending list 10% of take-home pay is recommended Step 5 Divide the remaining 90% of income among the remaining spending areas on the list First set dollar amounts to fixed bills and subtract from remaining income Distribute remaining funds to flexible and personal spending based on priorities Personalized Budget O Step 1 Record daily spending Step 2 Plan for next month's expenses and income to avoid surprises Step 3 Look for ways to spend less Add one small saving at a time to budget STORE Shop at a cheaper Cook at home Buy generic brands grocery store more frequently Step 4 Find ways to boost income Take a hobby or talent and make it a side business TIPS TO ACHIEVE YOUR BUDGET GOALS Recognize the Goal of Budgeting The goal of a budget is not to track everything eamed and spent The goal of a budget is to help control spending Try to spend less than your take-home pay Focus spending on what matters Track Spending for a Limited Time [•O шт Tracking all spending for a week to a full month can provide information about spending patterns Shows how spending even small amounts of money adds up Reveals areas of spending that othervise go unnoticed Ways to track spending Smartphone app Computer program Pen and paper Don't become too financially conservative in planning a budget MODERATE/ Budgets with no room for fun will fail Leam to moderate Implement the 3-Category Budget Mast people overspend in just a few categories Eating out Buying clothes Buying gadgets Entertainment • Pick three budget categories to monitor and control • Monitor spending in just these areas Where are people likely to cut spending In 2016? Restaurant meals 58% Cable or satellite TV 46% Rarying coffee in coffee 41% or doughnut shop Cell phone plan 39% Al cohol 35% Always Save First CHECKING SAVINGS Moving moncy from checking into savings first mcans it's less likely to be spent throughout the month In a survey on retirement savings for Bankrate's Financial Security Index for August 2015: 1 In 10 Americans aren't saving for retirement 10% 19% 14% 50% did not contribute saved saved Saved this year or last year more than last year less than last year the same amount Median retirement account balance COD - $1,000 For all households near retirement: For all households: $14,500 $2,500 Pay with Cash Try paying with cash for groceries, dothes, vacations, and nonessential items Credit cards and debit cards can make it easy to overspend FEE $$$ Withdraw a fixed amaunt Avoid ATMS, especially if they charge a fee of discretionary money at the beginning of the month Focus on Paying Down Debt pood According to TransUnion in the 3rd quarter of 2015: C0 = 11,000 The average credit card debt per borrower was Getting ahead is difficult without a plan to pay down debt $5,232 For those with multiple credit card balances: FIT. Tackle the card with Continue to make minimum the highest Interest rate first payments on other cards $ Determine how much you can afford to put toward debt each month and consistently pay that Don't reduce this amount when payments begin to go down $4 Build a Safety Net $4 In a survey for Banker's Financial Index for June 2015 on Emergency Savings: 29% 21% of Americans didn't have an emergency savings tund had some but not encugh to cover three months of expenses 13% 22% didn't know how much they hed or declined to answer had enough to pay tor at kast six months of expenses A survey on budgeting and unexpected expenses by Princeton Survey Research Associates Intemational found: 37% 23% 15% of Americans would pay for unexpected expenses vith savings would reduce spending on other things to account for unexpected expenses would use a credit card to pay for unexpected expenses 2$ It's important to build a safety net while paying off debt • Any progress made could be wiped out if an unexpected expense pops up and a rainy day fund doesn't exist Try to set aside 3 to 6 months worth of living expenses Put bonuses, tax rafunds, or yearly raises into safety net Sticking to a well-designed budget can better help you manage your take-home pay, retirement saving, and unplanned expenses. Take a look at your spending and see how you can turn into a budget. bankofamerice com Brought to you by: In partnership with: P PartSelect GHERGICH&Co. HIGH %24 %24

Fatten Up That Piggy Bank: A Budget Guide for Every Income

shared by Ghergich on Jul 15
Are you surprised to know that 1 in 10 Americans aren't saving for retirement? Learn about different budget plans and discover tips to achieve all of your budget goals with this helpful guide.


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