Money Matters | Make Peace with Your Money
Need ways to budget, save, and simplify in these stressful times? Start here. Over the next few months we will cover some common questions with a plan of action.
Q. We’d like to cut back on spending and boost our savings in hopes of feeling more secure. Is there a shortcut?
A. The quickest method to free up cash for savings: take a hard look at your latest credit card and bank statements and identify one recurring cost that you can reduce or eliminate – maybe a phone line or gym membership. Then redirect that amount to savings vehicles.
Willing to put in a little more effort? Use the “bucket budget” below. First, decide how much you want to save; have that automatically sent to savings or investment accounts so you can’t touch it. Then set up two checking accounts: one to pay bills from, the other for day to day expenses. You can withdraw only a set amount per week from the second, which helps rein in spending.
Bucket No 1: Future Goals (savings/investment accounts)
Emergency Fund: $___________
Total Bucket No. 1 $___________
Bucket No 2: Recurring Costs (checking account)
Loans/Credit debt: $___________
Total Bucket No. 2 $___________
Bucket No. 3: Day to day costs (second checking account)
(A) Monthly take-home pay $___________
(B) Savings and Fixed Expenses
(Add Buckets 1 and 2) $___________
(C) Discretionary money for bucket no. 3
(Subtract B from A) $___________
(D) Weekly Spending Allowance
(Divide C by 4.3) $___________
Total Bucket No. 3 $___________
- Determine which savings goals to tackle first with the priorities tool at cnnmoney.com/tools.
- Set up automatic transfers from checking to savings via your bank’s website.