Budget Method #2: Save First System
I’ll let you in on a shameful I-should-know-better-because-I’m-a- financial-planner secret of mine. I HATE making a budget and tracking my expenses. So, I don’t. “WHAT?!?! Don’t they make you turn in your meticulous monthly budget with corresponding receipts in CFP Class?” you say. NO!
What’s my secret? Well, I know how much I need to be saving every year to reach my retirement goal. I have automatic ways to achieve that goal such as maxing out mine & my husband’s retirement plans and monthly automatic deductions from checking to savings. Then I spend the rest of what’s left.
College, I save a little for here and there. If you met my kids, you’d know why I don’t try to fully fund that particular account.
So, with the Savings First System, all you need to do is figure out how much needs to be put away every month and set up an automatic deduction from your paycheck or savings. Then, you can spend the remaining of your income on pot brownies or whatever you like.
How do you know what your annual savings goals are for big ticket items? Your friendly neighborhood financial planner can help you work out those numbers. The web is full of financial calculators. Check out https://sullivanfinancialplanning.com/calculators/ for some handy tools to get started.
Come back next time for our last budgeting method – Write it Down and Track It.