If you'd like to become an avid saver, try this Save-to-Spend Plan. While most budgets are designed to control spending, this one is designed to expand your savings. And strangely-wonderfully-the focus on saving helps you to spend less.
Here's the plan: Based on a monthly income of $4,000. You can work from your pre-tax or after-tax income; pre-tax helps you save more. Either way, aim for these percentages:
1. Set aside 10% per month for retirement. ($4,000 x .10 = $400) 2. Save 10% for long-term needs, i.e. a new car, a down payment. 3. Save 10% for short-term and unexpected expenses, i.e. a friend's wedding this spring, replacing a lost cell phone. 4. Stash a final 10% for fun, frivolous, pleasure.
If living on the remaining 60% (in this case, $2,400) sounds impossible, don't flip out. This is the save to spend plan, remember? You don't really live on beans and 60% of your income. You end up spending two of those four savings buckets every month, and the third one as needed.
The beauty of this system is three-fold:Pages 1. By creating stashes of cash, you will be able to cover all your expenses-especially the curveballs-and avoid relying on little Ms. Visa.. 2. As you ramp up your savings, you'll pare down your spending, because you'll want to save. 3. You never feel like you're on a budget. You feel rich, because you have cash growing in your accounts.