Hal M. Bundrick
Summarizing what all money experts basically say.
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If you hate reading how-to articles about money, read this article anyway.
I’m with you. have understood. Researchers have found that some people can’t stand talking, reading, or thinking about money. “Make a budget,” say the experts. “Get out of here with that crazy story. I’m busy living my life, not the bean counter,” you might say.
Spreadsheet? “I’m feeling a little nauseous right now. I can’t stand it.”
But you don’t want to be bankrupt, miserable about money, or without all the good things money can bring. Maybe cooking. fishing. running. trip. sleep. Anything but money management.
This article has one central idea for managing money, for those who have trouble managing money. I will tell you in 12 words in total. The remaining 545 words of this article are strictly for entertainment purposes only. You can skip it if you want. Does not include bulleted lists. It’s not that complicated.
Ready? Read the next sentence and you are done.
here is everything you need to know
Cut off 20% of your take home income and live on the rest.
See, you can shorten that sentence. Use harsher words. Maybe we could have boiled it down to 8 or 9 words. Maybe less. You can flip it over and say, “Live on 80% of your income.” oh. It’s only 6 words. sweet.
that’s it. see you.
Oh, and for those still hanging around, I’ll gladly reward you with another 479 words. (See? They’re flying now!)
See also: Rainy days are here and you should start saving more
If you are interested, please see the details
20% of the net profit can be split in two. Put at least half of it into long-term savings for living after work. (The amount you put into your 401(k) or IRA can count as part of that 10%.) Use the remaining 10% for short-term goals like paying off debt or saving for a home. increase.
Once you’ve paid off your debts or purchased a house, ship, or French villa, simply transfer your extra money into a chunk dedicated to long-term savings. Ultimately, you may save 10% or more. It may start to approach the full 20%.
This boils down to what all money experts basically say, but they use more fancy words and they all look smart on YouTube. Or funny on TikTok.
If you live on 80% of your income, pay all your bills, eat out every dinner, travel and all that, you’re golden. Those are your needs and desires.
The 20% you set aside will eventually help you get out of debt and finance whatever your retirement or long-term goals are. You have achieved what the “rich” have.
And if you do it consistently, every time you get a raise, bonus, or windfall, you can kick budgeting’s ass by always setting aside 20%.
RELATED: ‘I Still Struggle With Impulse Buying’: Should You Cut Your Spending? These Financial Influencers Found Their Own New Solution
You don’t have to reach this goal overnight
If you’re barely living right now, saving most of your take home pay may seem impossible. Take small steps. There’s no need to rush, because we’ve unlocked the secrets to a happy financial life. On top he subtracts 1%. Then 2. Keep taking small steps until you get where you want to be.
Managing money can be very frustrating for many of us. If you have a simple plan, execution is the key.
Plus: Teach kids about spending and saving so they understand how to spend money rather than abuse it.
For those really curious, even
We’re going through this, right? All these extra words pay my salary. life is beautiful.
You will find that you have achieved the key to building your net worth without chasing dollars or using apps or online calculators. significantly less.
Ultimately, allocating that 20% to paying off debt and saving will make a big difference.
If you’ve ever deposited into a savings account that earns you good interest, or invested in a 401(k) or other retirement account, sooner or later you’ll start to wonder how best to manage it. You’ll want to get some advice. Live it up day. For that, you can hire an hourly-only fiduciary financial advisor.
By then, you will be a financial tycoon.
Learn more about NerdWallet
Hal M. Bundrick, CFP(R) contributor to NerdWallet. Email: hal@nerdwallet.com. Twitter: @halmbundrick.
-Hal M. Bandrick
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05-03-23 0501ET
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