How to build a budget and live free of financial stress
Many RNs spend lots of their time helping patients feel comfortable and spend less time taking care of themselves. One of the first things that should be in place in order to create a stress free financial life is a well-orchestrated budget and spending plan.
Having fun and enjoying life is important but sometimes excessive spending and extra vacations add pressure on monthly cash flow and this can often lead to credit card debt.
It really is pretty simple; you need to spend less than you make!
Once a credit card has been added to the financial picture cash flow becomes even more tight and an evil circle of trying to get out of debt, save and enjoy life all at once has begun.
What are some easy steps to take to get back on track financially?
It really is pretty simple; you need to spend less than you make, but just like trying to lose weight where you need to take in fewer calories than your burn the simplicity does not mean that is easy to do. There are so many decisions to make such as what to pay off first, where to save and how to coordinate it all while still maintaining sanity.
1.Build short term savings while paying off debt
Step one is to build understand where your money is flowing and one easy way is to fill out a simple cash flow/budget worksheet. Once that is done you need to stop funding things for future needs and take care of today’s concerns. That could mean that you would stop putting money into your 401k for a short period of time until high interest debt has been paid off. Simultaneously you need to start building up short term savings so that future unexpected life events don’t cause new credit card debt. By stopping a 401k or 403b contribution for 6 months or even a year will not cause you not to retire but can potentially get you out of debt and help you fill up your savings accounts.
2.Build a separate account
Set up a separate bank account from where all your fixed expenses get paid. Once you know what your fixed bills are (mortgage, rent, electricity, new savings, etc) you automatically transfer money from your checking account to this new account. That way you will have the ability to not having to worry about if there is enough money to pay for these fixed expenses. It will also set you up so that you can now spend everything in your checking account since you know that bills and future savings have been taken care off. Creating a system like this will give you piece of mind and will make budgeting more automated.
Now this is a very simple setup but it will help you get back on track. Once savings and debt has been handled you will need to focus on saving for retirement, college for kids and other wealth accumulation goals. Now do not forget to have your protection portfolio set up the right way as well so that if unexpected events occur you and your family is well protected.
2017-35672 Exp. 10/17