How To Create A Budget That Works

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Budgets are the new wave in the financial world and if you haven’t already heard about them, let me give you a crash course. So a budget is a set plan that tells your every dollar where to go for each month. Many people run away from budgets or have loose designed planned budgets. I will instruct you on how to create one, that not only works but will grow into a monthly activity.

FIND YOUR CORE AMOUNT

The amount of money you spend each month on reoccurring bills that are necessary for you to live I call core amount. This includes, rent, water bill, car insurance, utilities, internet, car note, cell bill, etc. These are items you know wont change month to month and you can easily predict the amount. Once you add this number up, keep in mind this is the amount you must absolutely make every month to live. Obviously, utilities and water may change but if you can’t live without it included it in this total.

ADD SURPRISES

This is when budgeting gets tricky if you don’t account for this space. Now obviously you can’t predict when your car will break down. However you can predict small things like, Mothers day gifts, baby needs new car seat, car needs oil change. When you sit down to budget look at whats happening in that month and try to put a set amount on what your going to spend. So its may 9th, me and my husband budgeted my mothers day gift and my mom spending the week with us. So therefor he doesn’t go crazy at the mall, and it allows us to figure out how many restaurants we can all go to when she flies in. Just remember budgeting is putting a name on every dollar you own!

INCOME

Once you finish getting your core amount and adding in all the surprises of the next month, you must come to income. Now for some people this is easy if you are salary. Salary people just write down how much you will bring in this month and your done. My hourly people you will need to write down the average you bring home. So if you typically bring in $1900 a month and one month you bring in $2200, just remember to save the extra for the months you don’t quite make the $1900 monthly income.

MATH

Last step,(my favorite part), do the math. Take your core income and your surprised expenses add them up now minus them against your monthly income. You should have some money left over. Thats because you haven’t taken into account your grocery,gas, and walking around cash! The amount you have leftover will help you decided the type of groceries you can buy, the restaurants you can go to, and the amount of nail/hair appointments you can make. This is what makes my way of budgeting easier and more efficient. When you see you only have $300 dollars leftover to spend on food and gas you SHOULD be willing to cut out restaurants and miscellaneous because the math doesn’t fit your budget. This way allows you to focus on the bills that make sense(rent, water,etc). When you get to the math part of budgeting and see all the things that don’t make your budget you will need to start making executive decisions, I call them budget cuts!! With this leftover money put how much you can spend on things like food and gas. I typically spend 200-220 on food, and gas is 100 for my family. If we only have $300 leftover for the month, I start looking at what can I cut. Do I need to lower my mothers day gift budget, maybe Jamal can get an edge up vs a haircut. When you know you don’t have a lot of money leftover you will start to change the way you spend.

Let me be super honest here, budgeting gets very difficult, it will takes months before you actually hit it on the target. Life comes with so many loops and turns its hard to direct money, but with chaos comes order you need both. This is what makes budgeting so important. You will set out a budget of where you want your money to go and of course your car will break down that month, or some random expense will pop up that will re-allocate your money elsewhere. Be ready and be prepared it takes time to get it right and some months you may not hit the mark. It took me about 5 months to finally hit the dot. I would get close and my son would run out of diapers, or my husbands car needed an oil change and I forgot to budget that expense. So start this journey knowing it will be a long trip and some months will get difficult. Don’t give up, keep pushing the journey will be fun and worth it in the end!

My 1 Year Review Of Robinhood (The Investment app)

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If you haven’t read my post on robinhood click here. I have officially had and traded with this app for over a year now. My background on stock is very bleak, I didn’t know much but the basic and few quotes I looked up from warren buffet. I did small but detailed research into a few stocks I used or thought were good buys and dove in and bought a share of each. I didn’t try to time the market and get the lowest price, my goal was to buy and hold and see how life would roll!!! Lets see what happened.

The Good

Square: ticker SQ– I bought this stock at $23.60, it now trades for $47.05. I gained $23.41 from buying and holding this stock. That is a 99.24% gain. (you want to be somewhere near 8-12%) My thought on buying this was it was an IPO(a new stock) and I saw how many young entrepreneurs were using the card reader. With buying local, shopping in the community, being a big thing for my generation I knew this stock would potentially grow, didn’t think it would be this fast!

Phillips 66: ticker PSX-I bought this stock $82.92 the first share and came back and bought another share at $91.38, it now trades for $111.81. I gained $49.29 that’s a 28.28% increase. Now I didn’t technically pick it I asked my husband what he wanted to buy and he looked up warren buffets stocks and this was one he owned. With a 2.70% yield and a warren approval we made a nice come up.

Target: ticker TGT– I bought at $54.64 and it trades at $71.73. That’s a gain of $17.08 at 31.26%. I didn’t do to much research I just thought well dang I’m always shopping here and I love this brand I might need to buy a share. I try to buy in spaces I understand, and want to be a shareholder of.

Teladoc: ticker TDOC– I bought at $32.90 and it trades for $42.00, that’s a gain of $9.10 at 27.66%. My mom told me about this stock. She believes this is where healthcare is going. I also recalled in one of my benefit meetings at work HR was explaining to us that we could use an online portal to talk to a doctor. It was new and seemed really futuristic, so I thought why not give it a go, and at only 30 a share my risk isn’t too high.

 

THE UGLY

Fitbit: ticker FIT– I bought 2 shares, one at $5.43 and $6.04, it now trades for $5.28. That’s a loss of 0.91 a -7.93%. I saw this stock at $5 a share and thought lets go for it. And now over a year it is still suffering. I still believe in fitbit but so far it has loss me money!!

However I wrote this post about a week ago many stocks have changed and fitbit is finally in the black for me. With stocks you can be up one day and down another. Thats why you must invest for the long hall and not get emotional when your stock isn’t doing well, and you sell too quickly.

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With no experience in trading and no educational background in the stock market I have wounded up making $102.33 that’s a gain of 35%. No savings account could net you that yield! I plan on sticking with Robinhood and trading with it for a while now. A few stock I plan on holding till my son graduates, others I am waiting to trade soon. Do your research don’t over think it, start small, and start reaping the benefits!!!

Any stocks you have bought that gave you great gains comment below?