Financially Free Series: Create a Spending Plan

by Chelsea Brashears on September 5th, 2013 | No Comments »

Create a Spending Plan

This is part 3 of a 5 part series. For this post, we will be talking about Step 3, saving 15-20% of your annual income. Be sure to start with Step 1 and Step 2 first.

Step 3—Commit to Save 15%-20% of Your Annual Income

One of the hardest steps in this series is to commit to save 15-20% of your annual income. For most, it can actually take several years to get to 20% but if you start somewhere it’s better than not starting at all. The easiest way to reach this goal is to instead of depositing your paycheck into your checking account, deposit it into your savings account and set up direct drafts from your savings to pay your monthly bills. You will also set it up to do a direct deposit into your checking account for living expenses.

To determine how much you will need for living expenses do a quick Value/No Longer Value Chart. Take a look at your bank statements, what are you constantly spending money on that is of value or is it something that you can live without? Example of No Value: Starbucks every morning, basic cable vs. full package, going out to eat 4 times a week vs. 1-2 times a month, etc. Only putting enough money to cover your values is only allowing yourself to spend that much. The rest is already in savings and “out of reach”.

What are ways that you are saving money for the future.

My name is Chelsea and my heels are parked in Katy, Texas. My life is far from normal! I am a mommy to a witty three year old boy (with another on the way); the smaller half to an eccentric oil field hubby; a full-time financial planner; the Networking Director of both WOAMTEC's Katy Chapter and Women, Wealth, & Wine; a devoted Christian; and so much more! I believe everything happens for a reason and that you should live every day like it is your last! I am a passionate Financial Protection Specialist and I believe in a protection-first philosophy. Clients benefit by working with me because of my genuine desire to educate and to truly make a difference in their financial future.

Visit me at Teddy Bears And High Heels or email me at [email protected]. Schedule your complimentary consultation today (consultations can be held face to face or over the phone if outside of Houston).