Hi, I’m Syga. I’m so happy you’re joining me on your financial journey.
Instead, budgeting can be empowering and help you feel confident. So you don’t cringe every time you open a credit card or bank statement. And don’t worry, our budgeting system doesn’t take hours….you’ll just need to devote an afternoon or evening to get it set up.
Can a Budget Change Your Life? (Yes!)
- The benefits of budgeting go far deeper than just getting you organized.
Getting in control of your money can impact your happiness. Why? Three
things shape our mood every day without us knowing it:
To your financial freedom,
• HOW YOU SPEND MONEY
• WHY YOU SPEND YOUR MONEY
• HOW MUCH YOU CAN SPEND
Escape the Pain of a Negative Financial Life (Really!)
- That’s why most people live in an almost constant state of financial stress. I
know this because I’ve been there. And I’ve helped many people escape the
frustrations of a messy financial life.
Fortunately, by spending an hour or two building your budget, you can start to
change that! That is exciting.
So let’s move on to the easy steps so you can see this change in your own life!
You’ll also find a budget form you can use farther back in this guide. I’m glad
Step 1 Pay Yourself First
Now, most old-school budgets have you start with your expenses. Then at the bottom, you see how much you have left over to save for your future or have fun. That’s not how you want to live. You work hard for your money. Shouldn’t you pay yourself first? So do that. Your goal? Shoot for 20% of your income, but even more is better. Can’t do the full 20%? Start with less. It’s the habit that counts. This line item can and should include first putting that money into tax-advantaged accounts such as your workplace 401(k). And if you don’t have an emergency fund yet, let’s build that first.Then once you’ve created an emergency fund and maxed out your retirement plan, start investing money in other accounts.Let’s step back. Do you see what you’re doing? You are putting yourself first. You’re investing in your future financial freedom. This is the initial step in helping your money support your happiness.
Step 2 Budget for Your “Needs”
Next, we need to determine an amount to cover what you need. That’s going to be the basics: Next is the fun part; we can budget for our ‘wants’with what is left. It’s probably about 30%.Here’s where we can really use this opportunity.Instead of buying more things, we may want to spend more on what makes us truly happy.Travel? Experiences? Improving our health? Services that free up our time? Aligning this with what we love will bring us the most happiness. Want financial freedom faster? Then budget
some of this to pay down debt and invest more.
▶Housing: Rent or mortgage, utilities (and insurance, property taxes and maintenance if you’re a homeowner)
▶ Transportation: Expenses to maintain a car, or costs of public transportation
▶ Health care
▶ Debt payments
Your goal here? Keep this to 50% of your income. Already over? Look to see where you can make adjustments and find savings.
Step 3 Budget for Your “Wants”
Next is the fun part; we can budget for our ‘wants’ with what is left. It’s probably about 30%.Here’s where we can really use this opportunity.Instead of buying more things, we may want tospend more on what makes us truly happy.Travel? Experiences?Improving our health? Services that free up our time? Aligning this with what we love will bring us the most happiness.Want financial freedom faster? Then budget some of this to pay down debt and invest more.
Step 4 Improving Your Budget
SYGA’S MODERN Budget
So, where do you go once your budget is done? You start improving.
Your goal? Build more for your future, so you can move toward financial freedom. Imagine the ability to decide whether you want to work or not! It’s possible, and investing more is the key. So maybe you put some of your “want” money into your investments for that purpose. But not all of it because you don’t want to sap the joy out of your life. It’s easy: look for ways to save money. Every dollar you save is a full dollar more in your pocket (whereas every dollar you earn ends up less after taxes).So get looking—make it a challenge. It can be fun to find unexpected savings.
Here are some quick and easy ways to start:
ARE YOU GETTING A TAX REFUND
If so, did you know you’re lending Uncle Sam money for no cost? Instead, put your own money to use now. Lower your tax withholding. That will increase your paycheck, and you can use that money to pay off high interest debt or to fund your savings or emergency fund. (Be sure to be ready if you get a small tax bill.)
COULD YOU BE LEAVING FREE MONEY
ON THE TABLE?
Over 17 million Americans do. You might if you are eligible for a retirement plan match at work but don’t contribute enough to get it every year. Don’t leave this behind…make sure you are getting your full match!
SHOP AROUND FOR BIG PURCHASES.
For anything you need, shop around. Home insurance, car insurance, car service and other everyday expenses can be easy to save. Go online and compare.
JUST GETTING STARTED AND
LOOKING FOR A BOOST?
See if you’re eligible for the Saver’s Tax Credit. That can mean $1,000 to $2,000 back when you make a retirement plan contribution.That’s free money if you qualify, so why not take it?
REQUEST A LOWER CREDIT CARD
If you’re one of the millions with high interest credit card debt, every dollar you save is a dollar to your bottom line. Did you know you can negotiate that rate? Gather your details, research what helps make this successful, then call and ask.
CANCEL ANY SUBSCRIPTIONS YOU
DON’T LOVE AND USE REGULARLY.
Many streaming services go unused, so why not commit to just one? Periodically audit your accounts to ensure you’re not wasting money on something you don’t use.
Step 5 Schedule Monthly Check-Ups
Now a budget won’t necessarily help you if you file it away and never look at it again. So once a month, sit down with a drink or your spouse and see if you’re on track. If there’s any adjustments needed, make them…and see how you can improve things going forward. Then, always continue looking for ways to save even more.
Your Next Steps
Now, we’ve just scratched the surface of improving your money. See, it wasn’t that painful, was it? Keep up the good work! You’ve got momentum on your side. Don’t lose it! Notice how you’re feeling…more optimistic about your money? Remember that feeling whenever you’re tempted to spend on something outside your budget. Frequently, life’s stresses make us search for an outlet, and spending on autopilot can create that.Instead, pause. What if you put that amount toward your financial freedom (by adding to your investments)? Or towards a travel fund for your next great trip? That can be far more impactful than another shirt or pair of shoes. Whatever you do, keep moving forward. If you like this approach, check out our Personal Finance 101 course, which will provide more life-changing advice like this. Plus, you can join our community of like-minded individuals actively working on improving their financial lives and reaching for their dreams.