All Your Worth: The Ultimate Lifetime Money Plan __LINK__
All Your Worth isn't based on lucky guesses or gut reasoning; it is the result of more than 20 years of intensive research. The authors don't offer you a few quick fixes that are destined to fall apart, and they don't waste time trying to solve problems you don't have. Instead, the authors lay out a breakthrough approach for getting control over your money. And they use this approach to help you conquer your financial problems, step-by-step. They help you create a plan that isn't just for a week or for a month; this is a plan that lets you master your money for the rest of your life.
All Your Worth: The Ultimate Lifetime Money Plan
Whether you are knee-deep in past-due notices or you just don't think you're saving enough, money worries can chew away at your life. Warren and Tyagi are here to tell you that you can stop the worry. You can change it all. With All Your Worth, you can have peace of mind for the rest of your life.
Practical financial advice for any point in your career or lifetime, written by Elizabeth Warren (decades before she ran for President) and her adult daughter. The step-by-step advice will walk you through setting yourself up for long-term success today. Their personal finance planning advice acknowledges that we live in a deeply unjust economic system. Their refreshingly shame-free plan advises breaking down your spending into percentages that cover needs, wants, and debt/savings, so that you can pursue your goals and financial stability while still getting to do stuff you enjoy. Solid, sound advice tailored for steady, long-term learning and growth rather than quick fixes.
The 50/20/30 Budget was popularized by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan. It is an easy-to-follow plan that allocates your after-tax income into 3 primary spending areas: Needs, Savings, and Wants.
The 50/30/20 rule is an easy budgeting method that can help you to manage your money effectively, simply and sustainably. The basic rule of thumb is to divide your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt.
By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently. And with only three major categories to track, you can save yourself the time and stress of digging into the details every time you spend.
This budget may differ from one person to another. If you find that your needs add up to much more than 50% of your take-home income, you may be able to make some changes to bring those expenses down a bit. This could be as simple as swapping to a different energy provider, or finding some new ways to save money while grocery shopping. It could also mean deeper life changes, such as looking for a less-expensive living situation.
Consistently putting aside 20% of your pay each month can help you build a better, more durable savings plan. This is true whether your ultimate goal is building an emergency fund, developing a long-term personal financial plan, or even preparing for a down payment on a house.
Now that you can see how much of your money goes towards your needs, wants and savings each month, you can start to adjust your budget to match the 50/30/20 rule. The best way to do this is to assess how much you spend on your wants every month.
Budgeting methods can help you feel more reassured and in control of your financial picture. But it also helps to have financial tools that can help you along the way. At N26, we want to help you reach your budgeting goals without breaking a sweat. Access your money from anywhere with your 100% mobile bank account, and get instant push notifications for an up-to-date picture of your finances.
Your savings can, and should, include several different tools. If you have a 401(k) plan through your job, get onboard as soon as you can: 401(k) savings are automated, tax-deferred, and often matched by your employer. An IRA is also tax-deferred. And many people pursue additional investment strategies to build a bigger nest egg.
Direct savings are critical, but if you have debt, especially high-interest or variable-rate debt, it makes sense to balance those savings with a plan to pay off debt. The sooner you can consolidate, reduce and ultimately eliminate most forms of higher-interest debt, the better your financial picture will look.
All Your Worth is a book for people who want to get their money situation under control and start saving. It is an easy read with worksheets to help you get your head around where you are and where you want to be.
For example, paying the full cost of college attendance for your kids would fall into the wants category, but it may make sense to spend that extra money even if it temporarily increases your wants allocation beyond 30%.
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The rule allocates money into three separate buckets based on after-tax income (your take-home pay). Organizing your funds into buckets can be easier for people who become overwhelmed with more detailed budgeting methods.
When your money is in balance, you always have enough to pay your bills, have some fun, and save for your dreams. And here is the best part of all. Once your money is in balance, you can stop worrying about it. Managing your money becomes automatic.
In many ways, the Balanced Money Formula is brilliant. I agree wholeheartedly that Needs should be kept under 50% of net income. (I think it's a good idea to split Needs: about 25% for housing, about 25% for all other Needs.) I also agree that saving at least 20% of your income (or using that money to repay debt) is an excellent way to find the path to wealth.
The 50/30/20 budget breaks your money up into three basic divisions: needs, wants and debt/savings. Parceling up your costs in this way can help you understand where your money is going more precisely.
You'll start by calculating your monthly take-home pay. This is your salary minus taxes. If you have a health insurance plan or retirement contributions deducted from your paycheck, add those back in. Now you know your monthly pay, let's divvy it up according to the budget.
It's important to note that the 50/30/20 budget assumes you bring home roughly the same amount of money each month. If your income is less stable from month to month, you may want to find a budgeting method that works better for your situation.
Divide your monthly pay in half. That number is the amount of money you'll allocate for needs. Housing, utilities, health insurance, groceries, transportation and prescriptions all count as needs. Some debt is considered a need as well, such as credit card payments or car payments. If you miss payments, your credit score is negatively impacted. Other needs include child support and alimony. Missing payments for either will get you in hot water. Therefore, it's a need.
But that's not an exhaustive list. If you're not sure what's a need versus a want, consider the impact if you take it away. Health insurance, for example, is a need because you'll incur fines if you forgo coverage. Plus, it's essential for your wellness. Trickier situations, such as whether your cell phone is a need or a want, take more thought. It might be a need, but owning anything above a base model cell phone and basic phone plan tilts more toward a want.
"People don't realize that many of their needs are really classified as wants (such as cable and morning lattes) and they may blow this ratio quickly," Andrea Woroch, a consumer and money-saving expert, told SmartAsset. She suggests starting "by making an honest assessment of your spending and look for ways to improve and cut back."
With the 50/30/20 budget, you allocate a larger percentage of your money for wants versus savings. You may want to change your allocations if your goal is to build wealth or pay down debt as fast as possible.
As for debt, this category includes student loans or other debt you want to put extra money toward paying off. While the "needs" category may have included a large portion of your essential must-pay debt (such as your credit card), this money is for any extra payments you can make once you put aside retirement or health savings account funds.
You don't have to feel tied to the 50/30/20 rule. If you want to tweak it to your personal financial goals, you can absolutely do so. While you probably don't want to dip below saving 50% for needs, you can always scale back wants and add more to your savings. On the flip side, if you're debt-free and have healthy savings, perhaps you can allow yourself more wants. Or, perhaps you add a percentage for charitable contributions. Whatever your financial goals are, remember that making a plan is the best way to meet them.
Finally, Woroch cautions against jumping into the plan too quickly. While saving 20% may not seem like a lot, you might surprise yourself. "Take it step by step though because it's a lot easier to adjust to small changes than to a complete life overhaul." 041b061a72