Can something as mundane as personal budgeting transform your life? The short answer is yes. The more extended response involves the many ways that budgeting can help you build a financially secure retirement, earn a college degree, take a dream vacation, start your own company, and create an investment portfolio. Truth be told, once you learn the ins and outs of budgeting, there’s no limit to what you can do. The devil is in the details, as the old saying goes. So, if you want to bolster your monetary wellbeing, get motivated by learning how a precise monthly budget is a gift that keeps on giving. Here are just a few of the things you can look forward to.
A Comfortable Retirement
Start planning now for a secure retirement. The sooner you get started, the better off you’ll be at age 65 and beyond. What’s the trick? For most working adults, the effective way to create a solid retirement fund is through payroll savings plans. Designate a fixed amount of each paycheck, between five and ten percent optimally, to a retirement account.
A College Degree
It’s tough to pay for a college degree just by rearranging your budget. However, you can set aside a certain amount for schooling and either borrow the rest or apply for scholarships. Consider putting two percent of your income into an education set aside fund. Then, use a free search platform to seek scholarships. Search platforms like these are the ideal way to apply for multiple scholarship opportunities simultaneously. They’re fast and efficient, cost nothing to use, and help you focus on finding money for school that need not be repaid.
An Exotic Vacation
You do not have to become a travel agent to plan an exotic, legendary vacation. Here’s a quick and simple way to leverage the power of personal budgets to cover the cost of a once in a lifetime vacation. Set a date for when you want to take the trip. Aim for five or more years in the future. Research the total cost of the excursion on travel sites and arrive at a ballpark dollar estimate. Add five percent to the estimate to account for inflation. Next, divide the total cost by the number of months between now and your travel date. This figure is your monthly savings requirement for the vacation.
Here’s an example. Assuming you want to visit Antarctica for two weeks, six years from now, and the estimated cost of the journey for you and your spouse is $15,000 after the five-percent add-on for inflation. You’ll need to save $209 per month to cover the entire cost. That’s $15,000 divided by 72 months, assuming no interest on the deposits.
A Second Source Of Income
Many people aim to set up a second income source in addition to their regular jobs. For many, the ideal choice is rental property. Shop around in your local area and see how much you need to put down on a rental unit and what the total cost of ownership is. Aim to save for the down payment over a two-year or three-year period, making sure you have room in your budget to cover the monthly mortgage on the second property. With careful, long-term budgeting, all things are possible.
