What You Didn’t Learn In School – Budgeting and Saving
You can’t spend more than you make. Living below your means is so important. More money must come to you than goes out.
Develop a written budget.
Evaluate it every month. Develop. Look at the after-tax dollars in your paycheck. List all of your expenses. Track. On the first of the month, compare last month’s and this month’s budget. Track what you spend, which means keeping receipts. Analyze. Look at what you are not doing well and make changes to improve. You can also plan your budget and then at the end of the month next to what you planned write down what you actually spent.
Annual financial physical.
Set a goal. Maybe it’s to get out of debt. The best time to do this is at the end of the year. If you monthly budget, recapping should be easy. Reflect on what went really well and what you need to change. You can also make up your net worth and predict what next year’s net worth will be. What will your next expenses be? What out of the ordinary expenses were there and will be? Can you develop an emergency fund? It’s a thoughtful process, and important one too.
50% of every salary increase according to Siegel. Believe it or not, you were living on your salary before your raise.
Take half of that raise and save/invest for the future. The other half is for a better lifestyle now. Easy. You just have to discipline yourself.
Save 90% of every bonus.
Or unplanned income. I already do this and my savings is incredible for a college freshman. Bonuses aren’t guaranteed. This extra money can help pay-off things and the rest can be put into savings. Or put a small amount towards something you REALLY want or need. Money from holidays, tax refunds, and inheritance count as bonuses. This money is to help you get and stay on track and maybe even get ahead.
Know their worth. Make copies of your benefits and schedule an appointment with a senior Human Resource representative. Benefit plans include health insurance, personal days, sick time, vacation time, disability, 401k plans, bonus plans and stock options.
As the years go on, make sure you add money to it. If something goes wrong, you have money to pay for it. Also, say a good thing happens like your friend decided to get married on the other side of the country, you have money to pay for gas/airplane, food, hotel and an outfit.
It is so worth the hassle. You save so much with coupons, have you ever seen the show Extreme Couponers? Yep, it’s real. And did you know the Dollar Tree excepts factory coupons?? I didn’t until there was an extreme couponer in line checking out. You can find them for anything in the newspapers, magazines, Google search, your emails, they come digitally and on paper. Go to the restaurant’s website before you eat out, chances are there’s some coupons and/or discounts.
Check the internet before going store to store to compare prices. If you find a better price at a store far from you, call the store closer to you and tell them about the better price for the same item and ask for the better price. If you go to a restaurant frequently, ask for a frequent discount. The owner may give you a discount and maybe even a freebie. When you are working on your home ask for free estimates from multiple companies and then compare their prices.
Saving vs. Spending mindset
You are probably one or the other. It’s a mind of discipline. I have recently became a saver and I can say it’s one of the best decisions I have made. There’s no good feeling that comes from being a spendaholic and not having any extra money.
That’s it as far as budgeting and saving. I learned a lot just from writing this. I didn’t come up with this all on my own… While I was working, someone returned the book “Why Didn’t They Teach me This in School? 99 Personal Money Management Principles to Live by.” By Cary Siegel. I snatched it up and it’s so good I just had to share. You can buy a copy here. It’s only $10.70!! I have decided to do a blog post on every chapter (a condensed version). Stay tuned for more amazing tips!!