A household’s finances are almost like a business. It’s all about money in, money out. How much are groceries, utilities, housing and transportation costing you, and what do you do with the funds that are left? Here are a few ways to think about your approach.
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Assess Your Income
What are you bringing in from your job, investments and other sources like rental income? This dollar amount is what you have to work with. Use it wisely!
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Track Expenses
Digital banking and budgeting tools have made it easier to keep an eye on your money. Check your accounts on a regular basis to see how much goes toward essential spending, like rent or mortgage payments and groceries, and discretionary spending, like dining out and travel.
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Set Savings Aside
The 50/30/20 rule is a useful guideline for how you split up your income—50% to needs, 30% to wants and 20% to long-term savings. If your spending doesn’t perfectly align with these percentages, that’s OK; however, don’t let savings become an afterthought. Be intentional about putting money toward retirement, emergency funds and major purchases.
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Have Fun with Extra Funds
With needs and savings accounted for, it’s time to reward yourself! Once you know your budget for discretionary purchases, you can enjoy life’s pleasures, like your favorite restaurant or a vacation, without feeling guilty about overspending.
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Review Regularly
Accountability is key. Keep checking your accounts and use budgeting tools, even if you feel like you’re doing a great job. This way, you won’t slowly let bad habits creep back in.
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Speak with a Professional
If you’re not feeling confident about your budget or managing your finances, a Vantage financial coach may be able to help. Connect with our team at a local branch about building a budget, growing your savings or any financial topic that’s on your mind.
