Oh how the mighty have tried and failed way too many times. On this #FundMeFriday I’m going to give you a quick and simple formula to follow so that you can better budget your money and therefore live a financially healthy lifestyle.
Here is a perfect budget for you to follow. I had posted in a previous blog something similar but I read about these percentages on NerdWallet and I really like them. Just remember 50/30/20 (obviously totals 100%). What do I mean by this? Let’s start with the 50. Fifty percent of all your earnings should be devoted to your essential life necessities. What are necessities? Well in a very generalized sense, it is your rent or mortgage, your utilities, your food, health insurance etc. Keeping in mind though that at times you may not spend 50% on the necessities but that doesn’t give you free reign to spend whatever is left over. Why not? The reason is because there will be times when maybe a utility bill is very high for over usage and rather than dip into savings, you will have a cushion from previous leftovers.
Now for the thirty percent. This is the percentage you’re going to love. Thirty percent of all your earning go toward your wants. What are considered wants? This is the percent of your earnings that you can spend on anything you want regardless of the level of frivolousness. I know this sounds intriguing but this is also the percentage that can get you into serious financial trouble. This is the percentage where people always try and make exceptions like, “I’m only over by $25. I’ll replace it next week”. No! If you run out of money from your wants percentage for that pay period, than you’re out of money. End of story. This is where you are either serious about financial freedom or you’re not. If you’re not going to stick to it than don’t bother wasting your time at all.
The last percentage is the twenty percent portion. I saved this for last because it’s the most important however, it is the first percentage you are going to take out of each earnings check. This is the savings percentage. This is the percentage that will one day metaphysically save your life. This is the percentage that gets socked away in your secret, non touchable savings account. You cut yourself a check for this twenty percent before you even buy a container of milk. If you are capable enough to work than there is nothing that can’t wait. Figure it out and just cut the check to your savings account with no excuses and with no regrets. It’s the biggest most important thing you can do for your life and for your future. That said, have you paid yourself today????
So to sum up very simply, your budget should be 50/30/20 which equates to necessities/wants/savings. I am realistic that most people hear the word budget and automatically their brain goes into lockdown feeling as if they are being punished. It’s up to you and only you to grow up and get past that feeling. If it makes it easier for you by playing a mental game with it then rename it. Instead of calling it your budget, call it your Financial House that has three stories. Or call it something of millions of other choices available to you. Just as long as you begin this financial journey.
You know what’s coming next right? I have a great book for you called Money Management. I am always recommending books because it is crucial that you continue to mentally grow and learn so please make sure you read as much as possible. All the books like this one should be available in your local library or you can possibly borrow a copy from a friend. If neither option is available to you, I will always have a link to the book on Amazon. Here is the link for today’s book if you need it>> https://amzn.to/2NdxTMp
If you choose to shop in Amazon, I would greatly appreciate it if you could use the link I have provided. As an Amazon Affiliate, it is possible I can earn a bonus and therefore continue to provide continued content we all enjoy. Thank you in advance!
#FundMeFriday
#LorisLoop
#TheMainHustle
#Entrepreneur
#Goals
#MoneyManagement
#ScottWright
