![]() ![]() Monitoring alerts, data downloads, and feature updates are available through the end of your membership term.Think of your budget as a see-saw once one side comes up, the other side must come down.” If you begin to start spending too much on discretionary items, for example, you need to balance out your mistake by spending less within another bucket of your budget. You need to hold yourself accountable when you begin to veer off into bad spending habits. Webster, certified financial planner with AKT Wealth Advisors advises, “Always ask yourself how you will be able to best stay on track once your budget is prepared. When you’re tempted to splurge, resist the urge by imagining yourself on that vacation you’re saving for. Motivate yourself by thinking about the vision you set for your financial future. Sticking to the budget is even more important. Setting up a budget is only the first step. If your refrigerator is six years old and the average life span is 10 years, start saving for a new refrigerator by putting away $25 a month for the next four years. Compare the age of your appliances to the average expected life span. Budget for it based on the age and make of your auto. You know that you’ll require auto maintenance, for example - you just don’t know when you’ll need it. Unexpected expenses don’t have to be unplanned expenses. For example, if you rarely use the Internet at home, you might cancel the service. All of these can be reduced by switching service providers or eliminating a device. For example, your communication costs may include Internet, cell phone, home phone, cable TV including premium movie channels and mobile devices. Another method is to review each expense and decide whether it’s necessary or can be reduced or eliminated. What’s left is what you have available for expenses. One method is to devote 20 percent of your net income to debt repayment and savings. The better question to ask yourself is how much you should be spending to meet your savings goal. ![]() To figure this out, look up your bank statements and see what you spend. If your calculation shows a deficit - your total income does not at least equal your expenses - you will have to adjust your expense budget downward to fund the difference through additional savings. Subtract that monthly income from what you project your expenses will be in retirement. For example, if you are saving for retirement, it’s a good idea to project the expected yield on bonds you own, your stock portfolio performance, any pensions you will receive and Social Security income. How much you need to save depends on the size of your family, your lifestyle and future plans. If that’s not possible, increase your income as well. Determine how much you need to save and lower your expenses until you reach your monthly savings goal. Instead of subtracting your expenses from your income and saving whatever is left, take a different approach. On the other hand, if you do answer it, you will have established a vision for what you’d like your financial future to be like.” He suggests using that vision as motivation to complete and adhere to your budget. suggests asking, “Why am I budgeting? If you can’t or don’t answer this question, your budget will become an exercise in futility. Todd Christensen, director of education for Debt Reduction Services Inc. Another could be retiring from the nine-to-five work world before you’re 50 or perhaps buying a second vacation home. If you have children, providing a college education is one goal. Consider where you are in your life and where you want to go. How and what you budget depends on the short-term and long-term goals you set. Before you start, you need to ask yourself at least five questions. ![]() In reality, it can be liberating to chart a path to financial freedom. Sometimes, when people finally decide to take charge of their finances - to stop winging it and prepare a budget - they think of a budget as a restriction, depriving them of the nicer things in life. ![]()
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