FINANCE MATTERS
Build a budget that works for you
Financial trends come and go, and it appears as though one approach to finance that industry professionals have long touted is having a moment. According to Debt.com, 86 percent of the more than 1,000 respondents who participated in the site’s annual budgeting survey admitted they budget their spending. That marks a roughly 16 percent increase since 2019. If budgeting is getting a star turn in individual financial planning, it’s well deserved. Budgeting can help people save money and achieve an assortment of financial goals, including paying down debt, financing tuition and planning a dream vacation. Each person’s budget will be different, but that doesn’t mean people need to take wholly unique approaches to building a budget. In fact, a conventional approach to budget-building can help people from all walks of life. • Determine your net income. The Bank of America notes that net income, also known as “take-home pay,” is the foundation of a budget.
In the era of direct deposit, it can be easy for anyone to forget how much money they’re taking in each month. Salaried workers can determine their net income pretty quickly and easily, while workers who are paid by the hour and freelancers may need to do a little extra work and serve as their own bookkeepers as they try to calculate their net incomes. • Monitor your spending. Spending habits fluctuate, but some patterns will likely develop over time, and identifying these patterns is vital to building a budget. Individuals needn’t wait to track their spending. Log into your bank account and see how you spent money each month over the last six months to a year. This can give you an accurate idea of where your money went after it came in. Monthly utility bills may be constants, but those bills tend to fluctuate depending on the season, so a closer examination can yield what the average cost is. Budgets may need to be tweaked during months when utility bills peak.
• Don’t discount the importance of things you want. It’s important when building a budget that money is left for more than just bills. Things you want to do like dine out, travel or additional expenses like entertainment should be built into your budget so you can still enjoy yourself and your budget is not blown up when opportunities to have fun inevitably arise. • Track and tweak. Progress can be tracked and the budget can be
tweaked if you’re still having trouble saving or your efforts to save are causing issues. Tracking progress allows you to see what is and isn’t working, while tweaking affords room to compromise if the budget is proving too restrictive or not allowing you to meet your goals. A conventional approach to budgeting can help people achieve their financial goals and feel better about their futures. MM22C513
FINANCE MATTERS 1 in 4 Americans don’t understand retirement planning but are willing to start learning online, new survey says (BPT) - Will I be able to retire? How much do I need to save? What if I outlive those savings? Questions like these are common across America’s current working population. Whether Gen X, Millennial or Gen Z worker populations, they each have hopes for a financially secure retirement, despite current economic uncertainty. When it comes to retirement, research shows 70% of Americans plan to but are unsure they will really be able to, according to a recent Prudential survey. Having enough savings is a primary concern for almost half (40%) of Americans who are not confident they can retire. Concerns such as this may cause people to continue to work as they age - be it full time in their career or part time in a less demanding position.
to use digital tools. Because of their convenience, digital tools may be a smart option for people looking to take the first step in their retirement planning journey, but they aren’t one size fits all. One free online option is Prudential Stages for Retirement, a platform that offers a personalized digital experience with access to a team of financial advisors. By answering a few questions, the platform provides customers with a “Retirement Confidence” score and shows them the ways in which they are strong in their retirement preparedness as well as where they may need to adjust to get closer to their goal. Users can also access a retirement calculator to see just how much they need to save to achieve their individual vision for retirement.
A HUMAN TOUCH IN RETIREMENT FINANCIAL KNOWLEDGE NEEDED This lack of confidence is coupled PLANNING Even as online tools help bridge the with a lack of financial knowledge. Just over 1 in 4 respondents (26%) retirement confidence gap, the survey said they do not have a strong under- shows that most people still want access to a financial standing of what to advisor - even if they do when it comes to retirement planning, If you feel anxious about aren’t physically in the room with them. and over half (59%) retirement and are A whopping 94% of do not have a 401(k) all respondents say account, one of the confused about they are interested primary savings in receiving advice vehicles for retirewhere to start, you are from a financial exment. Of those who pert in some mando, 21% are unsure not alone. ner. of how much money is currently in their On Prudential Stages for Retirement, account. people of all age ranges, levels of wealth Captured in the survey, which and retirement preparedness have onepolled 2,000 working adults across click access to an advisor, virtually or generations this spring, was a strong in-person, if desired. There is no mindesire to retire and openness to receiv- imum savings required to access an ing professional advice, yet a general advisor, so everyone can ask questions uncertainty about how to begin. For- to help them gain more confidence in tunately, online tools are becoming their retirement planning choices. more widely available, and some provide important insights that can bridge GETTING STARTED While most working people across the retirement planning gap. generations have retirement as a goal, many don’t know what to do to plan ONLINE RETIREMENT INSIGHTS If you feel anxious about retirement appropriately. Online retirement and are confused about where to start, planning tools like those from Pruyou are not alone. The survey found dential can be an effective first step that among those who expressed con- in gaining knowledge and boosting fusion about retirement planning or confidence that retirement dreams are worried about being behind, most will become reality. (65%) said they are open and willing
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