To start a simple BUDGET think about dividing your available After Tax dollars in a 50/30/20 allocation.

This means that half of your money goes to paying necessities, 30% to wants and 20% to savings and debt repayment.

Necessities include Housing, Utilities, Transportation, Food and Clothing.  Let’s talk further about how much is appropriate for each of these categories. It will depend on where you live, how you commute to work, and what kind of work you do.

Wants – we want to leave some room on a monthly basis so you can make smart spending decisions and learn that each purchase needs to be considered seriously to maintain your long term goals.

Savings and Debt Repayment – 20% of your available funds should go to the reduction of debt first, then to savings. To reduce daily stress about money the main goal must be to have 6 months of living expenses saved in cash. You do not dip into this account unless it is an emergency. To get to that point, all credit card debt must be paid off. This does not mean we close credit card accounts, it means that everything that is charged monthly, gets paid off in full when that statement is prepared.