Bite-Sized Budgeting: Your 4 Week Plan

I am a huge advocate for making finances part of your overall lifestyle. It’s common for money and investing conversations to be uncomfortable and often accompanied by anxiety. In fact, in a recent survey from Capital One CreditWise, 73% of Americans rank their finances as their number 1 stressor in life!  Let’s buck this trend and start this year off from a place of financial empowerment!

So where do you start? Drumroll please…yup it’s examining your spending. I know I know. Budgeting, boo right? When most people hear the word budgeting, they think boring, restrictive and no thank you. When you know what you spend and where you are spending, you can go after what you truly want from life! What’s sexier than that?!

Going through each month blindly, you can feel out of control or at the mercy of money. Having transparency on where your money is going, you can be intentional about how you spend money and take back control.  A popular and easy guideline to follow when it comes to your spending is the 50/30/20 budget rule. Senator Elizabeth Warren coined this rule of thumb in the book she co-authored, “All Your Worth: The Ultimate Lifetime Money Plan.”  Here is the breakdown of this rule of thumb:

 No more than 50% of your take home pay should be spent on essential aka must have expenses, think mortgage, rent, groceries, car payments, etc.

• At least 20% of your take home pay should be used for savings and extra debt repayments.
• The remaining 30% of your take home pay should be spent on wants, think dining out, streaming services, etc.

 Through my years 10+ years of experience, clients often push budgeting to the backburner since To Do Lists tend to be mountain high. I recommend dedicating 20-30 minutes once a week to your finances and here is a cheat sheet to get this done:

• Week 1: List out your Must Have Expenses (mortgage / rent, insurance, groceries, utilities, etc.)
• Week 2- List out your Nice To Have Expense (Amazon Prime, ordering take-out, etc.)
• Week 3- List out one-time expenses throughout the year (birthday gifts, attending a wedding, etc.)
• Week 4- Review your spending and see if there are areas you’d like to cut back on or make extra payments towards your debt

I have a Lifestyle Guide you can use if you don’t use an app or debt worksheet already! Sitting down once a year and reviewing your budget and spending can be mentally and emotionally draining so I recommend reviewing this 3 time’s a year. If you pace yourself with 20-30 minutes a week you’ll become less sensitive to these financial moments and on your way to financial empowerment!