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One of the Most Important Financial Tools
During my 22 year career as a financial advisor, I found that one of the most important financial tools was a simple monthly budget. Sadly, almost no one uses it, even though it’s one of the easiest to set-up, and among the easiest to implement. A monthly budget is merely a list of expenditures that you make each month. How can you determine whether or not you can afford to retire if you don’t have a good idea of what your monthly expenses are? By setting up a monthly budget, you control your expenses. Still not convinced? Let’s assume that you buy a $2.50 Latte every day. It’s just $12.50 per week, not a significant amount. Right? WRONG! If you put that $2.50 per day into an investment paying 8% per year, and allowed it to grow for 30 years (your working career), it would grow to a sum of $68,417.16. Now that’s real money! The value of a budget is that it keeps you focused on your expenses. If your budget allocates $150 per month for entertainment and you spend the entire amount in one week, you’ve got to go three weeks with no further entertainment. Without a budget, you just go to the bank and withdraw another $100 from savings. Granted, it’s a little painful now, but it will pay big dividends at retirement. (I’m 55 and I retired some months ago. Excuse me now while I freshen my drink.)
Right click to
download sample budget,
select save target as
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