Issue link: https://read.dmtmag.com/i/74289
Where to Build a Budget A key to building wealth? Knowing where your money is going. To help you create a budget for your life (trust us, it's not as bad as it sounds!), Kristine Ashe, vice president branch manager at Park Bank, offers easy steps Determine Your Financial Health A quick guide to getting a clear picture of your financial landscape You can't get where you want to go unless you know the way to get there—or so the saying goes. To help you determine if you're on the right path, Kristen Carreira, financial advisor with Edward Jones, suggests looking to the building blocks of a healthy financial future. Here, she offers six insightful questions that will guide you toward focusing on the aspects of your finances you need most, to build your financial fitness today. 1. Do I know my budget and spending habits? 2. Do I have defined financial goals? For example, do I know when I want to retire and how much I will need to spend in retirement? 3. Do I have six months income in savings for unexpected events? 4. Am I prepared if my spouse/partner or I becomes disabled or dies prematurely? 5. Am I saving enough for retirement? Am I saving approximately 15 percent of my sal- ary towards retirement in my employer-sponsored retirement plan and Roth IRA? 6. Is my portfolio properly allocated according to my risk tolerance and life stage? If you don't know the answer to any of the above, consider it your next step in building your financial future. Sit down and determine the answer, and if you need help, make an appointment with a professional who can help you sort out a solution that works for you today—and builds toward the best tomorrow for you and your family. Don't think of it as a budget. Think of it as your first step to building wealth. Make a commitment to honesty. You'll only succeed if you're open and truthful about where you're at and where you want to go. Get a sense of where you're at. Write down your income and ex- penses—all of them. Categorize your expenses into your fixed (rent or mortgage, utilities and the like) and variable expenses (dining out, groceries, credit cards). From there, track your spending for a month or more to make sure you have an accurate picture of what your life costs. Build a realistic budget. Once you see where you're at and what you're spending, set your budget. If you're living within your means, great! If you've overspent, or want to find better ways to use your money, set limits for those non-essential categories. What- ever parameters you set, make them realistic. Don't cut your "fun" money down to zero. You'll never maintain that. Keep it realistic and within your means to equal success. Revisit it. To start, be vigilant. Save your receipts, track your spending and sit down weekly to review. From there, review your spending enough to know where you're at and make adjustments. Put extra funds toward your debt Once you factor in all expenses and savings goals, you'll have an idea of what extra funds you have. Apply any extra to your highest interest debt. Every little bit (even $10) counts—and getting seri- ous about it (lowering cable or phone plans, for example) can help you pay down debt faster. Trust the process How you handle your debt, your spending and your budgeting really speaks to your success in being able to retire at the time and in the way you want. It's about getting to the goal of financial independence and security. It may take time, but you can get there. Struggling? Get help. Be patient with yourself. Learn from times you overspend and make adjust- ments. If you need help, reach out to a professional, who can help you build a better budget. July 2012 bravamagazine.com 59