3 Formulas That Make Budgeting Easy!
Money this, money that, money everywhere, wish I had more of that!
Growing up, I didn’t have anyone teaching me about the fundamentals of money. A savings account? 401K? Retirement? Honey please, I just knew that we didn’t have much of it and it was hard to come by. But as I grew up I learned more about the purpose of money and realized that money, when used wisely, can serve a greater purpose.
Being financially responsible with your money can lower your stress and help you make more of an impact. Just think, the more money you save now while you’re young the better off you’ll be when an unexpected payment hits or the more opportunities you’ll have to invest in property, businesses, stocks, and etc.
It all starts with a budget.
After doing some research I came across the best formula that allows me to budget my money easily and that my friends is the grand 50/30/20 rule.
50% expenses
30% spending
20% savings
So for example, if you made $800 in a week your budget will looks like this:
$800 x .50 = $400 expenses
$800 x .40 = $240 spending
$800 x .20 = $160 savings
Simple as that, and the great thing about this rule is that you can always modify it to reflect your personal financial situation. For instance, I use a 60/30/10 rule and I’ve heard of some using the 70/20/10 rule. It all depends on how much debt/expenses you have.
Saving money isn’t always easy especially if you’re like me and lash out money on cute candles from target and cups from Ikea, lol. But it is a practice I’m learning to incorporate into my daily routine. I always ask myself these questions when I make a purchase:
Do I need it?
Why do I want it?
Can I sell it in the future?
(except for food)
This week I challenge you to try and not spend money for an entire day, see how you feel, and write it down in a journal. Instead of buying that $16 lunch make your own and cut the cost in half. Learn how to save now, so you my friend, can reach financial freedom in the future.
Con Corazon,
Anisa