Grow Your Wealth: Tips For Successful Budgeting

Grow Your Wealth: Tips For Successful Budgeting

We would all like to have more disposable income.

Unfortunately, many of us are feeling the pinch. The good news is that with a bit of budgeting you can free up more cash-flow and increase your disposable income situation.

Right now, you might feel as though you’re trapped with the income you have unless you win the lottery or get a pay rise. That’s not the case. It’s time to assess your inflow and outflow to craft a budget that works for you.

You will no doubt identify disposable income during the process and you may want to grow your wealth using this.

50/30/20

Budgeting is the foundation of financial health. The general rule of thumb to follow is the 50/30/20 rule. It’s simple. 50% of your income should be used on your needs, which includes mortgage, loan payments, groceries, household bills, etc.

That leaves you with half of your income left. 30% of which can be used on your wants, with 20% going right into savings. What does your split look like right now?

 

 

What to Consider

It’s important to make informed decisions when it comes to spending. The above rule can be challenging because you may struggle with what falls into need versus want.

For example, many people don’t consider subscription services as a want that falls into household bills, those are wants not needs. Ultimately, the purpose of this rule is to break the cycle of living pay cycle to pay cycle and encouraging savings.

Now, for people with a high income, this split can lead to excessive spending. It’s best to discuss budget with a financial planner if you fall into the high-income earner bracket.

Likewise, people who are lower or middle-income earners may struggle to adhere to 50% needs split, particularly if they live in an expensive region. If this is your situation, then you need to really examine your spending and determine how best to allocate your funds.

Disposable Income

Tracking your expenditure is vital. You may be unsure of how to break it all down. Most banking apps will give you a breakdown of how you spend your money, but there are also budget apps available.

Although these are great inexpensive tools, we recommend contacting us for a more extensive and tailored wealth management plan.

You might be surprised to learn just how much money you spend dining out versus what you have budgeted for entertainment. It’s a great place to start in tightening the belt.

Your household bills have to be paid, but have you ever stopped to consider how much you consume unnecessarily? You can be energy-savvy and create disposable income by reducing your bills.

Additionally, consider the services you pay for:

Can you save money on car insurance?

Are you paying for multiple streaming services when one or two would do?

What about food waste?

Do you plan your meals and buy accordingly?

Or, do you buy thoughtlessly and end up throwing it in the bin?

 

 

Once you have assessed your expenditure, you will find disposable income in several areas. Now you can think about investment. If you would like to learn more about creating a healthy budget, disposable income, and investment, get in touch and download the full eBook “Unleash the Power of Disposable Income” via the link below.