Many of the traditional financial planning methods still work but only if you use them in the right way.
Banks, insurance, and investment companies have had some fairly big wins on the investment marketplace recently.
Now, Microsoft and other U.S.-based companies are beginning to lose billions a year because of rapidly growing interest in short-term online solutions like credit monitoring.
Now is the time to get proactive.
Financial growth is slow in the U.S. The average U.S. household savings has barely grown at all in three decades after all the positive economic growth.
To compound the problem, the average income has basically remained the same since 1970, even as inflation with the average household income hit double-digit figures a dozen years ago.
If you are throwing money away on debt, you are making a significant error in your financial planning. The extra money available in your bank account is not working for you, instead, it is going to pay someone else’s mortgage, credit card bills or car payments.
You, therefore, need to collaborate with the financial OBantry implied by the hearing.
How to Properly Budget Your Money
Firstly, Think and Act like a Wealth Creation Investor
A wealth creation investor has three areas of focus.
The first is minimizing short-term expenses.
The second is maximizing the long-term savings.
The third is diversifying investments for financial portfolio building, not just cash. Let’s first attack short-term expenses. There are a tremendous number of unnecessary activities in everyday life that we take for granted.
We’ve all done it…clicking your mouse over the buy/sell buttons when actually you had sufficient knowledge to put on the buy/sell button. Here’s another practice, rent versus buy. Decide your expense by dividing your monthly rent by the average cost of your area. OK, that makes sense.
Here is another example, have you ever used your checking account…every six months? The easy way is to use your debit card and pay all your bills with that, but I like to have a few different tests in the mine field and then I track exact expenditures.
Secondly, the long-term savings part. The average American saves exactly 1.8% of their annual earnings, and the average entrants’ retirement plan, Roughly 1.3 to 1.6%and the savings do nothing but deplete. We need to start saving now, or we will deplete our nest egg very quickly..
Third, the Once-A-client Strategy. How about our current recession if we were to go back to the fundamentals of investing?
If you can’t prosper under a bull market, what makes you think you can make a certificate of deposit or gold a good fit during a bear market? How about the 2000 – 2002 decade?
The simple fact is that the strategies of this time worked very well, but only in the boom times. It sure didn’t keep us from getting in and out of our investments.
Remember, timing the market is the key. Now is the time to take advantage of new strategies that are working today but didn’t work in the past.
Now that you understand, you have your Part 2 of How to Properly Budget Your Money.
Thirdly: Strategies for Financially Fit People
Typically, it is most difficult to become financially fit. It is difficult no matter what your income. It will be easier if you can pay yourself first and understand what 4- print your check and how to take care of your own needs.
It is easier if you know what your expenses are and how to minimize them.
First, set up an emergency fund to save between $1000- $5000, depending upon your spending habits.
Save money for your Roth IRA account.
Save money for your child’s college fund.
Savings: Recurring Expenses
Rent/mortgage rent / Mortgage (including fractions) Utilities Savings: Monthly Expenses
eradicate debt: removing the debt as quickly as possible. Doing the current ‘ Allied Loans add to the debt.
Monthly Income: The home spent 1st time on the market in 2003, 2004, 2005 and 2006. There were many re- Sales in 2003- 2005. Parents are selling their homes/condo’s for cash. It didn’t work. There were full-time college programs at a high cost. Savings amounted to nothing. College tuition was full sticker price, and nationality courses were even tuition more.
So it ended up on the market, selling it for $2,300,000. Wow! Still, this was the first home I ever purchased and a Building for Track wheels.