Creating a budget is easy, but sticking to your budgeting rules can be a challenge. The 50/30/20 Rule is still king when it comes to managing your monthly expenses and building your savings.

This rule breaks down your budget into Needs, Wants, and Savings, with your monthly net income being divided into 50% Needs, 30% Wants, and 20% Savings.

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• Six Ways Budgeting Can Help Boost Savings

The use of credit in today's world is pervasive. People charge meals in restaurants and purchases in boutique shops, pay for appliances on the installment plan and obtain loans to buy homes and automobiles, take vacations, and pay for schooling. These are just a few examples of how we use credit on a day-to-day basis. Now more than ever, it is essential that you be able to qualify for credit and maintain a good credit rating.

Having a good credit score is important because it can affect everything from employment to housing, and can also affect your ability to apply for auto loans, rent, and mortgages. 

Getting a beginner credit card with a small monthly limit can boost your credit score in the long run and can be helpful in building a healthy credit score. Our best advice is to look for a card that has a $0 annual fee, a low-interest rate, and to set a low monthly credit limit so that you can pay the balance off each month. Using websites that compare different credit cards can be useful in finding the best match.

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• Keeping On Top of Your Credit Rating

The one thing we’ve learned over our time working with clients nearing retirement is that they always wished that they had known more about how retirement actually works earlier. Our motto is the best time to start learning about retirement was yesterday, and the second best time is now.

We have a huge resource of articles in our Financial Resources that talk about all things retirement. By diving into how investing works and what accounts do what, you can make a dramatic impact on your retirement before you reach your golden years. 

By establishing one of each retirement account: Brokerage, Roth, and Traditional, contributing and utilizing your employer match to your retirement account, and by taking advantage of compound interest, you can make a huge impact later in life. 

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Also known as a rainy day fund. An emergency fund is a cash reserve that's specifically set aside for unplanned expenses or financial emergencies. Some common examples include car repairs, home repairs, medical bills, or a loss of income.

To get started, we recommend establishing a liquid-ready savings/money market account where the money you deposit will be 100% principle-protected with no risk. Ideally, you should have at least 6-8 months of expenses saved in this account.

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Living within your means can have a big impact on when you retire and how much money you will have in retirement. 

By making conscious choices, you can reduce your expenses, eliminate wasteful spending, and increase your savings. In other words, establishing better spending habits will help you achieve your bigger financial goals faster.

And the best thing about changing your spending habits? You don’t have to change all at once. Start with easier habits before progressing to harder ones. Over time, even small changes can add up to big results. 

Impulse spending is often a challenge, but the number one form of overspending is paying too much for something. Many forms of overpaying are obvious; if you buy something at a convenience store that you could get much cheaper at the grocery store, you're overpaying. This also includes avoiding spending money on big items that depreciate in value, for example, new cars and designer clothes.

Use apps such as Mint to track what you’re spending each month to see what you’re spending each month.

Resources:

• Six Ways Budgeting Can Help Boost Savings

Paying off or consolidating your debt is very important to have a successful retirement. 

In the most basic of terms, debt is an obligation that you owe to another person or entity after they loan you something of value. Usually, the thing borrowed and repaid is money.

Under formal debt arrangements like loans, lines of credit, and credit cards, you enter into a legally binding agreement to repay money you borrow, typically with interest, at a later date. 

Paying off your debt with the highest interest rates first, then continuing can be a good strategy to achieve financial freedom and set your retirement up for success.

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