Budgeting

Budgeting is an easy thing to procrastinate.  It’s not a fun process, but after you are done, you usually don’t need to adjust it very often.  My system is the 70-10-10-10 rule for your paycheck.  10% - into a short term savings account. Life happens and sometimes you need to be able to get at money quickly.  Try to have 3-6 months worth of income in this account as a target over time.  That way if a car breaks down, the roof leaks, or you lose your job, you’ll have access to cash.  

10% - into a long term savings account.  If you are like most 20, 30, even 40 somethings, you employer isn’t going to have a pension or defined benefit plan for you.  You need to start saving for your retirement.  By starting early, you have the advantage of time on your side. 

 **But what if you have credit card debt or a car payment or student loans you are trying to pay off?  What if you are trying to save for a down payment on a house or other large purchase?  This is where working with a financial planner comes in, to help you figure out from which savings account to reallocate your paycheck into.

 10% - give.  Whether it is to your church or charity, a generous heart is rewarded.  John Wesley, an English Evangelist, said to “make all you can, save all you can, give all you can.”  

70% - live on the rest.  No matter how your income fluctuates, you are in the habit of living within your means. 

Now for some, this is an unrealistic picture.  I know people who live paycheck to paycheck and some who spend more than they make because their lifestyles are too high.  Put pen to paper and see where you money is going.  You may be surprised to find how easy it is to adjust things and gain control of your finances with a little effort. 

If you need a budget worksheet, email me at kbolker@sigmarep.com and I will provide one for you!