Welcome back to the TRIO Financial Literacy Blog. Currently, we are on the second phase of “spending” related to becoming more financially literate/responsible.
You had homework to complete, did you do it? If not, before reading further, go back and seriously consider ending the task laid out.
By now, you should’ve looked at your finances and have a monetary objective for your money. What habits or trends have you discovered about yourself? Where is your money going? If you are unsure or you can’t see anything good, that is ok. You are here to shed light on the issue that needs a remedy.
The best remedy for financial literacy is budgeting! If you are like me, budgeting is scary. It sounds like a prison for money. However, that is flawed thinking. Budgeting is the key to financial wholeness. In researching, I came across tons and tons of budgeting plans and tips. In the previous blog, we mentioned having financial goals, and this is where budgeting comes into play. It is all about working backward, seeing the end goal first, and working your way toward it from where you are. It takes sacrifice and dedication, but there is gratification in your delay if you trust the process. When you create a personal budget, you are sorting your expenses into categories to make sense of your habits to meet your set goals.
During my research, I came across a budgeting tip that is the easiest and has impressive results. It is called the 50-30-20 Rule. Here is how it works; No more than 50% of income on needs, no more than 30% of income on wants and at least 20% of income on savings or debt repayment. This budgeting model is universal and maintained by many.
Take a few days, look at your income, and follow this rule to develop a budget. In the following weeks, we will look even closer at budgeting tips and tricks to best. Let’s build!