Kelly Community will be closed Monday, May 27 in honor of Memorial Day. Our digital services are open even when our locations are not. 

“May we never forget our fallen comrades. Freedom isn’t free.” – Sgt. Major Bill Paxton

Budgeting and Saving Made Simple

Sometimes people make budgeting money harder than it needs to be. Budgeting is simply telling your money what to do.

 

Most of us already know how much money we make in a given week or pay period. We also know what bills will be due. Setting your budget means telling every dollar where it will go before it gets out of hand and tells you where it’s going.

 

We recommend following the 10-10-80 rule. The first 10 percent of your income should be set aside in savings. That includes regular, emergency and retirement savings. The second 10 percent is what you give away to charity (schools, church, community). The remaining 80 percent is what you live on.

 

Saving

Savings is the first 10 percent, because you should always pay yourself first and should have money to fall back on in an emergency situation. This is the 10 percent you start your budget with. If you don’t have an emergency fund, start building it now.

 

We recommend putting your emergency savings into a separate savings account so it’s always there when you need it. Start building to $1,000 first to cover unexpected expenses like a flat tire, your phone falling in the pool, the washer and dryer dying, etc. Ideally, you should build up your emergency fund enough to pay all of your bills for three to six months, in case you lose your job or have a health crisis that causes you to be out of work.

 

Next, focus on retirement savings. Assuming you don’t want to work the rest of your life, you will need money for retirement. You may already be saving for retirement if your employer offers a 401k, so don’t forget about that. What you contribute to your 401k counts toward that 10 percent of your budget, and the earlier you start saving for retirement, the more money you will have. If you don’t have access to a 401k, Kelly Community offers retirement and investment services and can help you create a retirement financial plan.

 

Spending

Now that you’ve paid yourself, it’s time to pay your bills. Every pay period, decide which bills have to be paid and take that money from the 80 percent category of your budget. Do this before spending money on luxuries and non-essentials. The money you have left is “disposable income,” meaning it’s not earmarked for something specific and can be spent how you wish.

 

Budgeting doesn’t have to be complicated, and when you do it this way, you’re in charge of your money instead of your money being in charge of you.

 

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