When starting your financial journey, learning proper budgeting is the key to financial success. Furthermore, it will help to alleviate stress around your finances.
First, take your income for the month and allot 50% to needs, 30% to wants, and %20 to savings or paying off debt.
Needs are your mortgage or rent, car payments, utilities, and groceries.
Wants are shopping, phone and Internet services, and vacations
Savings (investments) and debt are an emergency fund, retirement, child’s education, and credit card payments.
For example, if you make $1000 a month you put $500 towards needs, $300 towards wants, and $200 towards savings. It’s probably best to try and choose your needs, wants, and savings to fit your spending.
Depending on your stage of life you can change the percentage applied to needs, wants, and savings or debt repayment. If you’re still living at home then you should be putting a higher percentage into savings and investing since the money for needs should be less.
This can seem like a daunting task but if you stick with it and stay disciplined it will become easier. Living on a budget will make you a more responsible spender. When spending money, ask yourself if this is something you really need or is it a want. Identifying your needs and wants will help you put together a budget. Since we know that budgeting is the key to financial success.
Refer to the link below to review different types of bank accounts:
A Bank Account to Suit Your Needs
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