FINANCIAL RESOURCES

Listing out your reasons for saving and planning for retirement can provide clarity. By prioritizing your goals, you can figure out how much money you need to set aside and how to manage your leftover income. Keeping a record of your monthly earnings and spending is also important, whether you do it yourself or enlist the help of a professional.

Fixed expenses are recurrent costs like mortgage or rent, utilities (electricity, water, gas, internet), cellular service, and debt payments. Treating your savings as a fixed expense can help. Set aside a specific percentage or amount each month for savings, and consider using automated deposits to maintain consistency. When treated like a fixed expense, savings become a less stressful aspect of financial management.

Variable expenses are non-essential costs that can fluctuate each month, such as dining out, shopping, travel, and entertainment. By reviewing your bank statements or receipts, you can estimate your total monthly variable expenses and figure out where you might be overspending. This awareness can help you curb unnecessary spending in the future.

Remember, some variable expenses occur seasonally, like holiday travel or gift-giving. To avoid being caught off guard, determine the annual cost of these expenses, then divide it by 12 to spread the cost over each month. If you don't factor these into your monthly budget, they could become unexpected financial burdens.

If you foresee needing the funds within a few years, a savings account is your best bet. It may not make sense to invest money that you will need before it has the chance to appreciate. Moreover, if you've already saved enough for your upcoming goals, a savings account provides a risk-free option. Whether you're planning to travel, renovate your home, or make a down payment, saving is a sound strategy. Let Empowerment Finances guide you in making the best financial decisions for your future.