How to Build A Saving & Spending Plan!
What can IKEA teach you about budgeting?
Opening the box with all those parts can feel overwhelming!
So...they give us simple pictures to explain all the small steps.
Without the guide to show you the 1st step, would you even start?
Budgeting is the same way.
If you sit down with a financial advisor and they calculate that you need $5,000,000 in retirement and to get there you need to save about $48,000 each year…
Like opening that IKEA box...It’s very overwhelming to go home and figure out where that extra $4,000 per month will come from.
Instead you should go through a process of asking yourself these 3 questions:
#1. What can I do TODAY to save towards my goals?
For example: You could make coffee before work instead of going to Starbucks...saving up to $5/workday…or about $100/month
#2. What will I do by the END OF THE MONTH to save towards my goals?
Ex: You could reduce your dining at a restaurant by 1 less night per month…saving appx another $200-$400
#3. What will I do by the END OF THE YEAR to save towards my goals?
This one will vary the most for you because that could mean 1 less big vacation…or, delaying a large purchase until the following year…etc
When you open your debit card and credit card statements to look for ways to create and stick to a budget…its overwhelming.
But start with tracking for the next month...where did you spend your money?
If you try to pick specific goals for savings per day, month, year, etc…it makes it feel more manageable.
Need help creating a budget for your household or your business?
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Best
Pat
Disclaimer: This is meant to be educational. It is NOT advice for your specific situation. Please consult a qualified financial professional before making changes to your financial strategy.