emergency fund Archives

It is important to understand where your money is going in order to save money, and stay on budget. I like something called the “40/20/30 system” I will break it down for you in this blog post and hope that you can benefit from using it.

50% of your salary for monthly payments such as rent, bills, health, cell phone, internet, etc. You know those monthly bills that you hate to pay but are essential.
20% towards savings. This is meant for your savings or emergency account and isn’t meant to be spent unless it is an emergency.
30% for leisure savings such as restaurants, shopping, movies, etc. This is the stuff that might not be a monthly payment, but often times comes back around. This can be flexible spending since you might not go out each month, and would rather spend it on something else.

The first thing you need to do is write down every amount of money you spend. Your bank account overview doesn’t count, because it doesn’t show what you are buying. I hate looking at my bank account because I am be surprised at the end of the month. I get depressed seeing how much I spent, then I go back through the bank statement wondering where it all went and what was purchased and what was a necessary. I mean honestly, do we even know where our money goes?

I like the Envelope System

This is for you to have a different envelope for each spending category. You just need to add the cash in the envelopes in the beginning of each month. This is a great way to reduce your spending and know how much you can spend. You will be forced to not purchase anything on your card.Once the cash is gone, it is gone and you can’t spend it elsewhere.

I know this might not seem realistic or can seem overwhelming to many so here are seven Baby Steps to think about for spending:

Emergency fund
Pay off all debt but the house
Have 3 to 6 months of expenses in savings
Save 15% of income for retirement
College funding for children
Pay off mortgage loan
Build wealth and give to others.

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Times are tough for everyone. BUT I am here to tell you that you are not alone and there are ways to save money. You can save money if you want to, you just have to put your mind to it and stick to it. Those two factors alone can be nerve wrecking, but know that you can do this!

When I switched from my full time job to blogging, I had to adjust to not make money like I used and live off my husbands paycheck. We have to change the way we spend and think about money. Here are some ways that we have dealt with saving money:

Have an emergency account: Things will happen and you will need money for it. Make sure to put money into this account as often as you can since you will need it for emergencies. This really isn’t a way to help you save money, but is a must since things do happen and you will want to take note of this! A number that you want to save per month even if it is small something is better than nothing!!
Meal Plan & Shop: This is where I am slacking.. its a work in progress!! I find it I’m more organized I can focus and not change my mind. Instead of buying those expensive TV dinners create your own. It’s simple I promise you. It only takes a few hours together everything to cook it and to save money. Make that extra time make it a habit to do it every week
Compare Costs: If you are price shopping you’re losing money. You would be surprised how the simple list items can be two dollars or a dollar less at another store. Price comparison is for groceries and for large purchase items so make sure that you look around at all items.

It is important to always know where your money is and to constantly analyze it. Make sure you know that you are getting a bang for your buck always all the time and you will be on your way to saving!!