If you are just out of college and are about to get married, you may want to take some steps right now to plan for your financial future. A certified financial planner can help you with this, and by starting now, you will be able to spend and save your money in ways that are wise and smart. Here are three simple principles you may want to start applying to your life immediately that will help you achieve your goals.
Always Use A Budget
Living within your means is a phrase that refers to avoiding debt as you live. While there are certain types of debts you cannot avoid in most cases, there are other types you can, such as credit card debt. To live within your means, you must come up with a plan that helps you do this, and this type of plan is called a budget.
A budget should list your total monthly income along with all your expenses. The main expenses you may have might include utility bills, student loan payments, and insurance, but there may be others too, such as rent and car payments. In addition, you should plan for the things you must buy during the month, such as gas, groceries, entertainment, and clothing.
Each month, you should create a budget that tells you exactly how you will spend your money. You can adjust this budget when necessary, but you should try to follow it as closely as possible.
Plan Your Savings As A Bill
The second key principle you should follow is viewing the money you will save each month as a bill. If you don't save money right away, you may not end up saving any money at all. Some experts suggest that you should try to save 20% of your income. This means that if you earn $3,000 per month, you should aim to save $600 of this money.
If your bills are high and you cannot save 20%, aim for saving 10% or 15%. Saving a certain percentage of your income every month will help your savings account accumulate faster. Once you determine how much you will save each month, write it in on your budget. Each time you get paid, take the amount you will save out of your checking account right away and transfer it into a savings account. When you do this, the money will be gone, and you will not be tempted to spend it as much.
Do Not Change Your Lifestyle With Pay Raises
The third principle that may help you manage your finances wisely is learning to keep your lifestyle just the way it is when you get pay raises. If you get a 20% pay raise and can now suddenly afford to buy more things in your life, you may be tempted to increase your lifestyle. While this will not interrupt your current savings plan, it will prevent you from saving more money.
Instead of letting your pay raises affect your lifestyle, continue living on the same budget you were on before the pay raise. Take the extra money you make and place it in your savings account. By doing this, you might be able to save up faster to buy a house, or you might save up faster for retirement, which may allow you to retire a little earlier than you had originally planned.
These are three great tips that may help you spend your money more wisely and save up faster for the things you want to buy. If you would like additional help with your budgeting, contact a certified financial planner today.
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