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Making Saving/Spending Rules that Work for You

Making Saving/Spending Rules that Work for You  3/15/19Financial rules of thumb can be handy, but consumers sometimes find it difficult to apply them to their own circumstances. 

For example, a rule of thumb for saving is, “save 10% of your income.”

A spending rule of thumb is, “use the 50/20/30 rule to manage spending—apply 50 percent of your take-home pay to needs, 20 percent to savings and debt payments, and no more than 30 percent to your wants.”

Handy as they may be, it can be difficult to apply those rules of thumb to your particular circumstances.  But don’t get discouraged.  Instead, decide on rules to live by that will work for you and your financial situation.

When it comes to saving money, putting away some money on a regular basis—even if it’s a small amount—can help you manage unexpected expenses and emergencies and reach your financial goals. After all, it’s our habits that matter most! 

On the other hand, when it comes to directing how you your money will be spent, giving yourself simple guidelines for managing your spending can help you reach your financial goals.

Whether saving or spending, breaking goals down into small actionable steps helps keep us from feeling overwhelmed.  

Actually writing down our goals makes it much more likely that we will stick to it.  In fact, some sources claim that writing goals down makes it TEN TIMES more likely that we will achieve them!

Simple worksheets to use in setting 3-step saving and spending goals for ourselves are available from the Consumer Financial Protection Bureau (CFPB).  They can be easily accessed online by searching “my savings rule to live by CFPB” and “my spending rule to live by CFPB.”

Savings and spending goals, and strategies to reach them, are two of the personal and family finance topics that are addressed in SOLID FINANCES webinars.  The webinars were developed by NDSU Extension Personal and Family Finance Specialist, Carrie Johnson, and MSU Extension Economics Associate Specialist, Joel Schumacher

Loaded with topic-specific, free financial education opportunities for adults, SOLID FINANCES webinars can be viewed in the comfort of your own home, as your time schedule allows. Visit http://solidfinances.msuextension.org/index.html.

What do the free online webinars do?  They give consumers the tools they need to make sound financial decisions for their own individual situation. 

What do the free online SOLID FINANCES webinars not do?  They don’t sell any products of endorse any companies. 

Topics for the current series of webinars include auto, flood, and life insurance, the psychology of money, flexible spending plans, and ratings on charities. Links to all current and archived webinars, supporting worksheets and resources are at the website provided above. 

Photo Source: https://pixabay.com/photos/dollar-currency-money-us-dollar-499481/  (downloaded 3/19/19)

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