Last Updated: April 8th, 2021
Desiring financial dominance? How to live your life and manage your money.
One of the hardest tasks is sitting down to manage finances. It causes major cases of heavy sighing, and frustrated, hair-tearing sessions. On the other hand, you desire a sense of control with your money. How do you live your life while truly controlling your finances?
As it’s not often an event with a designated space in the calendar (like a work meeting with upper management), you may find yourself pushing out the necessary review of bank statements and act of outlining a hard budget. It’s the point of coming to terms with your frequent spending habits and steadily sneaking up on “lifestyle creep” — rather than the other way around.
How Do Your Savings Measure Up?
Taking a look into the critical need for a budget involves seeing how people of various age groups are saving. Business Insider reported on a Personal Capital study of 318,000 savings, money marketing and CD accounts, and found that the average 20, 40, and 60-year old had approximately $3740, $10,611, and $15,193, respectively.
The majority of individuals do not tend to have money that’s “liquid” in cases of emergency. With statistics that consistently show low savings levels across many generations, we have to ask ourselves: How do I compare? Am I prepared with the finances I have available? Can I achieve the financial dominance I’m seeking?
If you’ve ever wondered where to steer your goals in terms of life savings and emergency savings goals, Bankrate shares the specific goals that are recommended by Fidelity Investments:
For your 30th birthday, for example, you should aim to save at least one times your annual salary. By age 40, you should have three times the amount of your salary, six times by your 50th birthday and eight times by age 60.
In this article, Bankrate also shares a specific breakdown for each major life milestone, 401k goals, tips on investing and common savings amounts.
Your budget will save you for the time you put into it. You will know where your budget stands and how much your wallet can take a hit.
Currently, you may or may not be living paycheck-to-paycheck. You may or may not work four jobs, eat plain oatmeal three times a day, and wait for money to land in your bank account. (Based on a true story.) You may be reading this and feel tired of your financial situation dictating your life, and it’s not something you want to continue, or even return to.
Building a budget and understanding where your money is being divvied up, makes you feel more prepared. Why wouldn’t it? Even if you lost your job tomorrow, your car tires needed replacing, or you needed to head to the doctor, you’ll understand your situation well in advance in order to manage your expenses, and at the end of the day, come out on top.
You’re the manager of your money. Not the other way around.
Where Do I Start For Financial Dominance?
Start with a spreadsheet to organize your spending habits. Section sheets by month, organize columns and rows for categories of spending, and measure against budget limits you set for yourself going forward.
You don’t have to recreate the wheel in building a budget document, unless you want to. There are plenty of templates out there, including budget templates in apps like Mint, and platforms like Google Sheets and Excel.
Suggested Budget Templates
Whether you’re putting together your master budget in January, or wanting to map your finances starting in July, the major push is just to sit down and start planning. There’s no wrong time to start. With a template in hand, half the work is already done.
You can get free (tried-and-tested) budget templates from the following sources:
- Google Sheets: Sign in to your account and search and select a budget template from the available templates.
- Microsoft Word: Open a new document and browse the available templates to open and get started.
- Mint: Offers a collection of 8 free templates based on your specific lifestyle, whether you’re managing your home, daycare expenses, or college lifestyle.
- Michelle Reed: A business and lifestyle Youtube creator who shares finance tips and resources with young women. Her budget also includes tithing.
- Other sites offer additional customized templates, but be wary of downloading files. If in doubt, I recommend you bookmark the free Virus Total tool here to check files and URLs BEFORE you open them.
From your chosen template, you can plan out what your month looks like in several categories of your life; from investing and saving for retirement, to groceries and loans, to extra spending for subscriptions and personal shopping choices.
Where do you take direct action to reduce your routine expenses and better manage your future expenses? Your personal financial dominance comes from what you do now. The following are areas to consider when combing over bank statements now and planning for the years ahead:
Reduce Expenses Now
- Decrease frequency of routine appointments (hair salon/barber, nails, dog grooming, etc.)
- Reduce or pause scheduled money transfers between bank accounts
- Decrease your grocery bill by $___ per month
- Cut down on take out meal charges by $___ per month
- Cut down on leisure spending by $___ per week (coffee, movies, bars, etc.)
- Return to minimal payments on loan payments and credit cards (if paying above minimum)
Plan For the Future
- Canceling unneeded or forgotten memberships (review bank statements)
- Setting reminders for auto-pay billing functions on accounts
- Setting reminders for billing due dates in your mobile calendar
- Create an appointment with a financial advisor to become versed in investing your savings
- Setting scheduled investments to stock and retirement portfolios through apps like Acorns and Stash, versus depositing funds to your savings account
- Consider investing in precious metals, such as gold or platinum coins
- Surround yourself with resources that allow for better investing and financial knowledge, like Mad Money episodes or the Finimize app and newsletter
Overall, this list is a general snapshot of actions to take for budgeting.
Regroup and Reassess Your Budget
Keep your eye on what goes in and out. Make changes as needed.
Return to your document at the end of the month and reassess:
- Did I go over my set budget?
- Did I stay in line with what I planned to spend?
Beyond your budget worksheet:
- How do my choices impact my next month or week of spending for my general needs?
- How do my financial decisions directly impact those who may depend on me?
- What can I save/invest today to undercut the lure of short-term gratification, in favor of a better long-term reward or goal?
- How do I personally define and measure my financial dominance?
In this process, note the potential for your personal spending habits to lend themselves to eye rolls and “tsk-ing” on judgment calls from yourself — to yourself. Regardless, the current situation is a firm jolt to the reality of “lifestyle creep”, your habits, and understanding both your wallet and bank account better. Your personal financial dominance is dependent on the time you invest here. (No pun intended.)
Take a minute to review the shared templates above, download (or create from scratch) and start playing around with the numbers. Make a budget today to understand and prepare for where your money is going tomorrow.
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