Financial literacy begins with budgeting and it can be a lot easier to budget when you have money to budget with. Take these simple steps:

Step 1 - Review your finances.

Step 2 – My Needs vs. Wants.

Step 3 – Why do you spend money and how to save.

Step 4 – Create a budget that works for you.

 

Creating your budget is nothing more than simple math. Deduct your expenses (needs) from your income and you will know how much you have left to spend on your "wants" (spending money).

    Monthly income

  –   30% of monthly income (for taxes and other deductions)
  –   Monthly expenses (including savings)                              .

  =   Spending money

How to Save

People agree that having a budget and saving is a good thing but find it difficult to do so every month. But it is possible to save for your short and long-term goals, for emergencies, and even retirement.

The choice is up to you!

Ways to Save

Reduce housing budget   ~   Reduce household expenses

Reduce food bills   ~   Reduce utilities/cell phone bills

Reduce transportation costs   ~   Reduce miscellaneous expenses

The 70-20-10 Rule

 One easy way to save is to follow the 70-20-10 Rule.

· 70% for living expenses (rent, food, clothing, gasoline)

· 20% for savings

· 10% for retirement

or  10% for debt (student loans, car payments, credit cards)

or  5% for emergencies (car repairs, medical expenses, unemployment)