Paul Fain, president of Asset Planning Corporation recently joined Brittany Bade at WBIR television for a Q&A discussing your New Year’s Resolutions. Starting a budget consistently ranks near the top of New Year’s Resolutions. But we all know what happens next…more than 70% of New Year’s Resolutions are abandoned within 2 weeks! How can you succeed at budgeting in 2017?
PAUL, WHY IS BUDGETING SO HARD FOR MOST PEOPLE?
According to a Nielson’s survey, people said the challenges of budgeting included:
- Too time consuming
- Too much data and details
- No fun: facing reality
Solution: KISS – Keep It Simple Stupid. Having a budget shouldn’t mean that you don’t get to have a life.
SO LET’S TALK ABOUT A SIMPLE BUDGETING STRATEGY, THE 50-20-30 RULE.
You don’t have to track pennies! The 50/20/30 Rule:
- 50% Essential expenses (housing, healthcare, transportation, food, student loans)
- 20% Saving (15% retirement, 5% short-term – emergency fund, repair fund)
- 30% Personal Discretionary (gym, dining out, clothes, gifts, vacation fund, extra to retirement or debt)
REALLY BUDGETING IS AS MUCH MENTAL AS IT IS FINANCIAL ISN’T IT?
- Make budgeting a habit;
- Use tools (Mint.com, yellow pad, etc.)
- Make tweaks here and there;
- Stay close to the core concept (50/20/30);
- You are guaranteed to gain financial ground, rather than lose it.
- Make more significant strides toward a frustration-free financially free future!