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budget

In Budgeting on
October 18, 2017

Age-Based Investment Strategies That Will Put You On The Path Toward Financial Success

Am I the only person who from time to time, googles how much money should I have in my 401k by age X?

I honestly wish there was someone to tell me the answer to how much money I should be investing by a certain age. But truthfully, there is no answer- everyone is different, every situation is different. There is no “secret number” as to how much you should have in your bank every time you turn a year older. I do believe however that there are simple strategies that we can take to set ourselves up for financial success at each stage of life and the earlier that we start, the better.

In your teenage years, lets be honest, you are not thinking about saving for your future. Your current worries are about what car to buy or where you are going to grab your next bite to eat. You have all the time in the world to save, so why start now? I am sure that this is what 90% of teenagers nowadays are thinking (and can you blame them?) I wish someone had sat me down at the age of 18 and told me what the importance of saving early really meant. It could be the difference between tens of thousands of dollars in your bank account. A little investment at this age can add up (with compound interest) to a WHOLE LOT of money later. Do not hesitate to start a secret stash- you will be way head of the game later if you have this mindset now.

Aged-Based Investing:

If you are a 20 something, like me, you are most likely focusing on school, your career and possibly marriage. At this age, I would encourage you to avoid debt at all costs. Try to pay in cash and only buy things that you need. Of course, have a little fun here and there- but keep your end goal in mind! I also would highly recommend starting to pay off your student loan debt NOW, if you can afford to do so. Don’t let the interest accrue daily to the point where you owe double the amount of where you started (yes, I know some people with this problem). You may also find yourself at the point in your life where you are considering moving out of your parents house and renting and/or purchasing a condo/house of your own. If you can set aside $200 a month from age 20 to age 30, you will have saved $24,000. This is a great start toward a great down payment. Lastly, open up a 401k- put aside whatever money that you are comfortable with. If your employer offers a match, take it (it’s free money!)

Now… fast forward- you just turned thirty. You are now shifting gear from focusing on yourself to the possibly of starting a family. It is important to try putting a little extra money aside each month towards an emergency fund. I would recommend having a safety net of around $10,000-$15,000 set aside in case of emergency. Hopefully at this point you have a place of your own or are looking into home ownership. Try to put down as much of a down payment as you can (while still keeping your Emergency Fund intact). The more money you can put down, the higher the chances of avoiding fees such as PMI. Believe me, I know it is hard to come up with a 20% down payment (I am with you). Try to think outside of the box. Is there someone who may be willing to help out financially? It will save you a lot of money in the long run if you can come up with more money now. 

If you are reading this and you are in your forties, you already know that it’s time to buckle down. You are at the peak of your career; your kids are growing up and now is the time to start thinking about college costs. Have you set aside some money for them? Consider opening a 529 savings fund, if you haven’t already. Being that you have been saving for a while now, you should have a little bit more of a cushion in your bank account. Now is a good time to open a good growth stock mutual fund or Roth IRA. Try to contribute 10-15% of your household income into it. Retirement should be at the forefront of all financial decisions that you make from this point forward. My husband and I started on this step early. We opened our first Roth at age 25- again, the sooner the better! 

Speed ahead. You are now fifty. Keep focused! Hopefully now you are investing the full 15% into your 401k and maxing out your Roth per year. You may be tempted to dip into your retirement savings, but hold off if you can- let that compound interest keep working for you. Now is the time to focus on paying off your mortgage faster.

60 onward. This is your time to relax, travel and enjoy all of what life has to offer. Hopefully you have saved up a large enough goose egg that you do not have to live paycheck to paycheck and can actually afford to give back. Have a little fun with your money, you earned itliterally. At this point, you might also consider purchasing long term care insurance. Prepare now for the care that you may need down the road.

You made it to the end, thanks for sticking with me. I hope that this article has helped provide you with a working guideline on how to be saving at different points in your life. Remember, the heart of investing is all about your attitude. No matter your age, it is never too late to start saving. The time is now and your future depends on it!

This post was written by Jess but first seen on at Ashlee & BinderFor valuable financial advice from Ashlee, be sure to check out her blog, Ashlee & Binder. Tell her I sent you!

In Budgeting on
August 30, 2017

Practical ways to cut back on overspending

prevent overspending

Do you ever think to yourself, “where did all the money go this month?” …I’m with ya sister. It seems like every day something new is popping up, a baby shower, wedding, birthdays and it feels like you can never seem to get ahead! Well, I am here to tell you that you can! It will take time, persistence and some patience but if you follow these simple rules you will certainly be prepared for the ‘next big announcement’ that is going to drain your wallet even more…(or maybe not!)

In a previous post, found here, I talked about setting up a budget system where you can track your monthly expenses. Creating a budget is so important because it allows you to see, first hand, where your money is being spent. I also challenged you ladies to keep a running list of your ‘miscellaneous spending’ for the month. Did anyone try this? If so, pull out your list and let’s compare. Having a list or document with your ‘misc.’ spending will become a helpful tool, so that you can look back and visualize where your money was spent each month. My husband and I have a column in our excel budget where we write down this type of spending. The only items on our budget that actually fluctuate from month to month are our food budget and miscellaneous, so it is important to us to see which month(s) we spent more or less, and find out why so we can make adjustments to make things better. This is an example of what your list might look like.

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Once you have your list handy, take a look back and see if there was anything that you spent in the month that you didn’t need or something that you could have passed up on. When I started keeping track of my spending, my first few lists were so long (no, you are not the only one!) They were full of things we didn’t need and I realized how much I was spending on things that I should have said ‘no’ to. I also found myself spending almost all of our money in the beginning of the month (when we had it) and then realizing, “Oh crap, its August 15 and I have only $15 left for the month.” 

If you find yourself to be the type of person who is overspending and you want to change this habit, I’ve come up with four simple rules to help you SAVE money!

 

S– “Say no!” At some point, if you are trying to save, you need to be strict with yourself. Skip the impulse buys and stick to things that, when you look back at your budget at the end of the month, were buys that you found to be budget-worthy. For example; A trip to the movies with your kids, or a day out at the beach building memories with friends. 

A– Avoid temptation. Avoid stores or places that make you want to spend money or entice you to want to buy. If you’re a shop-a-haulic, avoid the mall….simple as that! Again, refer back to rule #1, say “no!”

V– Very important. Only buy items that are necessary. Do NOT skip on mom’s birthday gift; these are the things you should be spending your money on!

E– Earn your reward. Allow yourself one “splurge” item a month. Give yourself a ‘salary’ that you are allowed to spend each month that fits comfortably within your budget. Also, make sure you (and your spouse) get paid every month. To make it easier, you can “cash out” your money on the first of every month, and that is yours to spend without any questioning. GUILT FREE spending is the way to be!

I hope some of you found this post to be helpful and can see what I am getting at with all of this. I want to help you! My hope is that by taking some of this advice that you will be start to see some extra money left over each month. Once this happens, we can discuss what to do with it and how to wisely invest and save for your future.

This post was first seen on Society Letters here.

In Budgeting on
July 19, 2017

5 easy ways to save money on the fly

Are you making saving a priority in your life? Or do you find it “too hard” or that there “just isn’t enough money to go around?” I know exactly how you feel, I have been there! For that reason, I have been thinking what practical advice that I could offer to help answer these questions. Here is what I came up with.

 

1. Set reasonable goals and stick to them

2. Make saving a monthly bill

3. Only spend what you have

4. Cut back on unnecessary expenses

5. Pack your own food

 

  1. Setting realistic goals is super important. Yes, everyone would love to save $10,000 a year, but is that actually reasonable? Could you actually make that happen? You need to set goals that make sense for you and your family. What goals work for me are different than what may work for you. Everyone is different. People make different incomes and have different expenses. Goal setting is completely personalized to what fits YOUR needs. Make sure to set reasonable goals and then of course, stick to them! Building a hefty savings account does not happen overnight.

 

  1. I suggest treating saving as a monthly expense. Make saving just as important as paying your mortgage bill, rent, or purchasing food. If you put your bills first, then whatever is left over at the end of the month will be your allotted guilt free spending money. My husband and I put our savings right into our budget. It is something that is routine and doesn’t change. We don’t make excuses and make it a payment that has to be met every month. Since we started doing this, we have been able to contribute a significant amount per month into my student loans (on our way to tackling all of our debt!!)

 

  1. By only spending what you have left over at the end of the month, you will not be accruing more debt or racking up a large credit card bill. This is where you need to be in control of your spending and know when to say no. I struggle with this myself, especially when there is something extra that I want to buy that month or somewhere special I want to go. My husband and I set a monthly allowance that we both have to spend on miscellaneous items. It’s simple, if you don’t have the money, don’t spend it.

 

  1. I think most of us can relate to this. If you were to make a list of your monthly spending, would there be things that were non-essentials? Things that you could have passed up or said no to? Now don’t get me wrong, I’m not saying that you can’t have fun…but all in moderation. When you work hard, you should be able to spend your money. But I suggest being reasonable with your spending or splurges. Do you go to Starbucks 15 times a month? What if you cut back and only went 7? That would be an extra $25 every month just from cutting back on coffee. What else can you cut back on? Do you have a monthly gym membership that you don’t even use? Then get rid of it! Go for a walk or run outside. YouTube at home workouts. That would save you another $60 a month. If you are unsure if you are overspending in this area, write down a list of what you bought for an entire month. At the end of the month look over your list and decide what was necessary and what wasn’t. My husband and I do this every month. We keep track of our food receipts and our miscellaneous spending. At the end of the month we keep eachother accountable for our spending.

 

  1. It sounds so simple doesn’t it? This step alone can save you so much money. I know to many people who buy their food out everyday or order out every night. Do you know really how much you are spending on food every month? My husband and I are big on packing lunches, especially since we know how expensive food is! If you have a husband who eats as much as mine does, we would go broke if we didn’t pack our own lunches everyday.  Buying cold cuts at the grocery store will last you 5x more than the 1 sandwich you bought at the local deli for lunch one day. Make a list of what you like to eat and then go pick it up! Yes, it may require some food preparation late on your Sunday night…but the money you will save will be worth it. You will thank yourself later.

 

I hope you found some of these tips to be practical and helpful. Saving isn’t something that happens overnight. It takes time, patience and even practice! Make saving a routine bill and then pretty soon it will just become second nature. They say that it’s so much easier to save when you are young, so why not take advantage of our time? What do you have to loose? All you have is money to gain!

 

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