Millennial Moment

Note your net income. The first step in creating a budget is to identify the amount of money you have coming in.

1. Track your spending. It’s helpful to keep track of and categorize your spending so you know where you can make adjustments.
   1. Begin by listing all your fixed expenses. These are regular monthly bills such as rent, utilities, or car payments.
   2. Next, list all your variable expenses—those that may change from month to month such as groceries, gas, and entertainment
2. Set your goals. Make a list of all the financial goals you want to accomplish in the short- and long-term.
   1. Short-term goals should take no longer than a year to achieve.
   2. Long-term goals, such as saving for retirement or your child’s education, may take years to reach.
3. Make a plan. Use the variable and fixed expenses you compiled to help you get a sense of what you’ll spend in the coming months. With your fixed expenses, you can predict fairly accurately how much you’ll have to budget for.
4. Adjust your habits if necessary. Having documented your income and spending, you can start to see where you have money left over or where you can cut back so that you have money to put toward your goals.
5. Keep checking in. It’s important that you review your budget on a regular basis to be sure you are staying on track.

• The simple answer is to save as much as you can.
• Every 1% you have will have a huge impact on your future net-worth. Just increasing your savings rate by 1% could help you retire up to 2 years earlier due to the impact of compounding.
• Instead of saving the money that’s left over at the end of the month (because there probably won’t be much), try saving money first.
• Saving 5-25% of your income each month first and then spending the rest will greatly benefit your future. You will also be able to spend the rest of your money that month without feeling guilty for not saving.
• When you save money, you are not only paying yourself first, you’re preparing so you will have money in the future.
• The key to saving money is to start slowly and escalate over time. It becomes a habit overtime, and you don’t miss the money as much.