Creating and having a detailed written budget allows you to make better decisions with your finances on a daily basis. When faced with a spending decision, a budget requires you to stop and think about the purchase to prioritize your purchase. With a basic budget, you’ll have a much better understanding of where your money goes and where you can possibly trim expenses. For many people, this may mean cutting back on some of the little things that can add up or it may mean taking a closer look at spending to make deeper cuts in order to create a wider gap between monthly inflows and outflows. We help our clients identify where their income is being spent so they have a clear picture on their personal cash management. From there, our team reviews your current expenses to advise on improvements where possible in order to help increase cash flows.
For example, you may consider eliminating unnecessary subscription services or unused recurring memberships or other smaller variable expenses. Bigger cuts in your expenses can come from refinancing your mortgage or wiping out an entire spending category, such as dining out, or reducing costs associated with credit cards by consolidating into a larger lower interest card. We may also audit current insurance portfolios to help you truly maximize your savings habits and create the best possible outcome for your planning.
Why is reducing expenses important? There are three main reasons:
- it can free up more money in your budget so you’re less inclined to rely on credit cards or loans to cover spending gaps;
- if you have debt, adding extra money back into your budget can help you pay it off faster; and
- having extra money can help you boost your emergency fund or grow retirement savings.
Use this retirement calculator to create your retirement plan. Calculate your retirement savings balance withdrawals for each year based on multiple varioables such as social security benefits, spousal benefits and more.
Download a free budget worksheet here to see how you are tracking.