Math 101 in finances

My next few blogs will focus on money. With today’s economy, I want to give you tips that will help stretch your dollar. I am not a professional but this advice can help. I want to explore: budget ideas, meal planning, good apps to use for discounts and more.

If you have an idea for me or have a question leave a comment and I will try to answer it to the best of my knowledge or put it into one of my future blogs.

Math 101

3 Types of people

People who build wealth 1+1=2

We call them the Savers, they like to double their investments.

They are goal-oriented. They have a plan and fun is not part of that equation.

People who overspend 2-4=-2

We call them the Spenders. They are the fun outgoing that lives life. They spend without thinking and cause a lot of financial stress. They might have to take out a loan to fix their mistake.

People who are in between 3-1=2

They are the responsible ones. They pay bills and enjoy life.

They also like to invest in their future.

So, which one are you?

We usually gravitate to one extreme or another. We are “all fun” or “on a spending freeze.” But we need our finances to be at a happy medium.

The spenders tell themselves, “but it’s on sale!”, “I really need it,” and “there’s only one left.” The savers say, “that’s a waste of my hard-earned money.“vacations are too expensive,” or “do you know how much gas that would be.” Instead, we need to budget. When we budget, we are permitting ourselves to spend.

There are 3 things we need to do to enjoy life and not feel stressed out.

1. Save $1000 emergency fund

2. Keep your bills at 70-20-10

3. Save for retirement

Let’s break it down

Emergency Fund

An emergency fund - is money that we need to set aside for emergencies; a car repair, a water heater going out, or an ER visit. You can’t use it for going out to eat, buying anything you want, or having your hair done. You are trying to create a good cushion in case there’s a big emergency.

If money is already tight, here are some ways to build an emergency fund.

Part-time job Plasma Donation

Uber Eats Delivery Garage Sale Site

Misc jobs- housecleaning, mowing lawns, refurbishing things, mechanic

70-20-10 Method

70% Bills

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25% House 45% Other Bills

(includes Insurance) (Includes food & gas)

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20% Fun

(Dining, vacations, activities)

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10% Savings/

Retirement

Billing Questions

What if my house payment is higher than 25%?

*Make sure your other bills are less than 45%, or refinance or move into a house you can afford.

What if your other bills are over 45%?

*Try to lower your flexible bills. Cable, car insurance, and groceries can all be lowered if you ask or look for cheaper quotes or prices.

*Work on getting rid of the misc bills - credit card and loans

Should I use my fun money or savings to help with my bills?

You can, but when you don’t give yourself a little freedom, you will get discouraged and want to quit. If you live beyond your means, we must change those areas first.

My utility bills are way too high. How can I lower them?

You can make simple changes to help with the cost.

• Lower your ac or heat.

• Put towels or blankets around the window sill.

• Take shorter showers.

• Don’t water the lawn as often.

• Don’t keep the fireplace running all the time (gas).

• Make sure all lights are off.

• Don’t run things when you’re not using them.

Saving for retirement Age Gauge

20’s 10%

30’s 15%

40’s 20%

50s and older - as much as you can

Next week I will share tips on saving money. There are so many apps and techniques that can help stretch a buck.