How many times do we set a financial goal with the full intention to achieve it only to stop within a month? This time, we’re ending just as strong as we start. And our secret weapon is going to be a budget plan! We promise it’s not as stressful as it sounds, especially with Palmetto First Federal Credit Union on your side.
By creating a budget, you will be able to see where your money is going, where you will be able to save money, and how to have a clear mind when it comes to your finances. Today, we’ll explain two popular budgeting methods for you to consider: the “Zero-Sum Budget” and the “50-30-20 Method.”
One of Dave Ramsey’s philosophies for financial success is the zero-sum budget. Essentially, it is your monthly income minus expenses equals zero. So, if you make $3,000 a month, that $3,000 should be allotted to food, utilities, transportation, housing, insurance, miscellaneous expenses (giving yourself a buffer), debt, etc. This way, every dollar you make is being put to good use—either by spending or saving. Click the following Ramsey website link to see how you can make your zero-sum budget for free.
This source will take you through a series of questions asking your current financial goals, your monthly income, your monthly payments and debts and savings, and will calculate it all for you. It’s free, and it does the math for you—sounds like a win, win!
Another budget plan that could work for your savings plan is the 50-30-20 method. That is, 50% on needs, 30% on wants, and 20% on savings. The “needs” department includes rent, mortgage payments, utilities, food, and transportation. The “wants” area is designated for dining out, vacations, entertainment, new electronics, and fancy coffees. And the “savings” is allotted to exactly what it is named: savings and investments. This can be your regular savings account, an IRA account, or investing in the stock market. Take the time to write down all of your expenses and categorize them within these three departments, and you will thank yourself later.
With either of these budget plans, you will go from wondering where your money went over the month to knowing where, when, and how it was spent. Life should be enjoyed without the looming stress of your financial status. Start the new year off right while also looking out for your future self and start your budget today!
Need an extra set of eyes for your budget? Don’t hesitate to reach out to our team for advice or financial help!