How can I budget to save? - If you want to save money, then you need to budget it into your spending. You earn a certain amount of money per month, but you spend a certain amount as well. The key to saving is adding saving into your budget.
There is an interesting phenomenon that happens among people. The more money you make, the more money you spend. This happens with those into real estate investing, it happens to those working a regular job. You sell another property, you get a raise, somehow that money finds its way for something else to purchase.
How can I budget to save
How can i budget to save?
The only way to break this vicious cycle that will rob you of the money you should be saving, is to follow this list to get it done.
#1 Develop a Savings Goal - Just like any goal you set, being vague isn’t going to work. You can say you want to get into real estate or you could say I want to purchase 6 mixed use properties on the southside of the city and get into commercial real estate investing. Which seems more believable or likely to happen? The latter, correct.
You need to have specifics, not I want to save a lot of money. Set an amount. I want to save $100,000 by this date and here is how I am going to do it. You goal can be bigger or small, just set one.
#2 Commit to Saving - This is the important set in how to make this happen. You have to commit to it, everyday, all day, no exceptions. You don’t need a 12 step program to save. You have to make a decision, stick to it, and get started sooner than later. It can be with smaller amounts, but you have to start.
#3 Budget by Percentages - When you are setting your budget, do it by percentages. You can get specific when it comes to the cost of the items you are going to perchase, but for the categories use percentages.
Here is an example. It is my favorite budget and I call it the 70, 20, 10 budget. It is simple. Here is how the money is broken down in this budget: 70% of your living expenses, 20 percent goes to debt reduction, and 10% goes to savings account.
When you get a raise or earn more money, then there is an increase to each of the sections. If you have your living expenses under control, then i would recommend putting more money into saving. That is your goal right?
And once you are finish paying off your debt, then you should consider putting that extra money into saving each month and you will find you are on your way.
#4 Automate Savings - Now that you have your percentages in your budget and know where your money is going, automate as much of this process as possible. By the time you get your check or it is deposited into your checking account, a certain percentage should be sent to your IRA or your 401k, or even your savings account. This way, you don’t miss the money when you don’t see it come in to your savings account. It is automatically invested or saved into your funds.
With these steps, you can become success at reaching your goal of saving for retirement, your future, and the life ahead. - How can i budget to save?
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