Month: December 2020

  • Creating a Monthly Budget: A Step by Step Guide

    I was in my mid-twenties before I created my first budget.

    I was out of college and had my first full-time job. I made decent money, but I never seemed to have any left at the end of each month. And I couldn’t seem to figure out where all my money was going.

    When I finally sat down to track my recent spending, it was an eye-opening experience.

    I realized I was spending way more than I wanted to on eating out and ordering take-out.

    That’s when I created my first budget. It hasn’t been entirely smooth sailing since then. But I can tell you that the times of my life I’ve been most diligent about monthly budgeting are the times when I’ve seen the most success!

    When I budget consistently, I reach my financial goals, feel confident in my financial situation, and have money left over at the end of each month.

    Creating and sticking to a budget does not have to be overwhelming. It doesn’t have to be scary. It is 100% doable.

    In this post, I’m walking you through how to create a monthly budget, even if you’re a beginner or hate budgeting.

     

    Creating a Monthly Budget: A Step by Step Guide

     

    Determine your income

    In order to create your monthly budget, you first need to figure out what your monthly income is.

    For some of you, this will be easy. Maybe you’re a salaried employee without any side income, in which case your income is the same every month.

    But if you’re an hourly employee, a tipped employee (such as a server or bartender), or are self-employed, this will be a little more difficult.

    If you have an irregular income, look at the average amount you bring home each month. This will help you identify which number to build your budget around.

    Read More: How to Budget With an Irregular Income

    If you’re married and have joint finances with your spouse, make sure to incorporate their monthly income into your calculation as well.

     

    Make a list of your fixed expenses

    Next up, make a list of your fixed monthly expenses. Fixed expenses are those that are the same every month. This would include rent or mortgage, insurance, cable and internet, student loan, car payment, etc.

    It’s important to plan for these expenses first because then you’ll have a better idea of how much money you have to allocate for the rest of your expenses.

     

    Track your spending for the past three (or six) months

    Once you’ve figured out your income and fixed expenses, you know how much money is left to put toward variable expenses.

    In order to really figure out how much you want to spend in each budget category, I think it first makes sense to figure out how much you’re currently spending in each category.

    Go through your bank statements for the past three months and track where your money has gone. I would break your spending up into categories and determine how much you’ve spent monthly in each category. Here are some categories you may want have:

    • Utilities
    • Transportation (gas, car maintenance)
    • Groceries
    • Eating Out
    • Shopping
    • Household Items
    • Personal Care
    • Entertainment
    • Hobbies

    These are just some examples of categories you might have in your budget. You can customize them to fit your lifestyle.

    By doing this, you’ll get a good idea of where your money has been going and which categories you spend the most on.

    I recommend going back at least three months to really get an idea of what an average month looks like.

    If you’re feeling really ambitious, go back even further. The first time I put together a monthly budget, I went back six months and it helped me put together a really good picture of my spending habits.

     

    Determine your spending goals

    Now that you know how much you are spending, it’s time to figure out how much you want to be spending.

    I’m guessing there are quite a few areas in your budget where you could be spending a lot less than you are.

    If you don’t normally track your spending, chances are that you’re going to be surprised at your spending in some areas, just like I was at my food spending.

    You might realize just how much those weekly Target trips are adding up and decide that you want to set some limits for yourself.

    You can also look for substitutions you can make, such as switching phone companies or getting rid of cable and sticking with Netflix or Hulu.

    I do think it’s important to be realistic when setting your spending goals. For example, if you’re currently spending $750 per month on food, I don’t think it’s realistic to set a spending goal of $250. However, you might start by aiming to spend $650 or $600 per month.

    Also, remember that setting spending goals doesn’t have to mean cutting out unnecessary spending. It’s okay to spend money on things you value, even if other people see them as unnecessary. For example, my husband and I love to eat out, so we leave a lot of room for that in our budget.

     

    Prioritize savings first

    There are a lot of people who wait to see how much money they have in the bank at the end of the month and then decide if they are able to throw a little in savings.

    The problem here is that there might be a lot of months where you aren’t putting any money in savings at all.

    Instead of just saving what you have left at the end of the month, start budgeting the money you’ll save and making that your first payment after you get paid. I have an automatic transfer from my checking account to my savings account the day after I get paid every single month.

    To make your saving even more effective, set specific goals to save for. You can start by building up your emergency fund. Then you can decide what other financial goals you want to save for.

     

    Decide on a debt-payoff plan

    While you’re creating your monthly budget, it’s important to factor in how much money you want to put toward debt.

    While it might be tempting just to pay your minimum monthly payments, it will take you a lot longer to pay off that debt, and you’ll be spending a LOT of interest.

    One debt payoff strategy a lot of people use is called the “snowball method.” This means paying your minimum payments on all but your smallest debt and you put as much money as you can into your smallest debt.

    Once that smallest debt is gone, you take all of that extra money and put it toward the new smallest debt. And then, ideally, once you’ve paid off most of the debts, you’ll be able to put really large payments on your largest debt.

    I actually prefer a method called the debt avalanche. Rather than targeting the debt with the lowest balance, you target the one with the highest interest rate.

    The debt snowball is the most cost effective in the long run, because you’re saving yourself money in interest.

    Read More: Debt Snowball vs. Debt Avalanche: Which Debt Payoff Plan is Right For You?

     

    Track your spending

    Once you’ve created your monthly budget, it’s important to track your spending to make sure you’re actually staying on track. Otherwise, the budget is useless!

    There are plenty of monthly budgeting apps you can connect to your bank account to track your spending. Many people use an app for this. For many years I just used a spreadsheet and tracked each transaction manually. This is definitely more work, and now I use an app to track my spending.

    You can check out my list of the best budgeting apps to help find the right tool for you.

    As you’re tracking your spending, check in often throughout the month to make sure you’re staying on track with your budget. That way, if you get off track with your budget, there’s still time to get back on track.

     

    Reevaluate your budget often

    Once you’ve set up your budget once, you’re not done. A lot can change with your finances. You might have new financial goals come up, such as wanting to splurge on a vacation or start saving for a house.

    You also might create a budget and then within a few months, realize there are certain categories that need some tweaking.

     

    Bonus Tip: Find the right budgeting app

    Some people are fine with a spreadsheet or plain or pen and paper for their budget. In fact, that’s how I started out. But I eventually found the value there is to be had from a budgeting app.

    One benefit of a budgeting app is that you can automatically import your bank and credit card transactions to track your spending. This allows you to see how well you’re sticking to your budget.

    There are also budgeting apps that have special features such as the ability to set up sinking funds, calculate your net worth, or calculate your progress toward debt payoff or your financial goals.

    Read More: The Best Budget Apps to Help You Manage Your Money

     

    Final thoughts

    Creating a monthly budget might seem overwhelming, but I promise it will get easier as you get the hang of it.

    And even more importantly, you will be SO glad you took the time to set up a budget, and you’ll love the financial benefits you start to see.

    Monthly budgeting will go a long way in helping you to start saving money, pay off your debts, and reach your long-term financial goals.

  • What is Net Worth (And Why You Should Care About It)

    I didn’t start tracking my net worth until I was in my late twenties. If I’m being honest, I didn’t think it was all that important. I thought my income was the metric that really mattered.

    But here’s the problem with that: your income is just a snapshot of your finances. It doesn’t show the big picture.

    And by not paying attention to my net worth, I was able to conveniently ignore my lingering debt and low savings rate.

    But once I started tracking my net worth each month, I really saw my finances start to transform. I felt more motivated to make extra debt payments and move money into my savings account.

    Not sure what net worth is or why you should care about it? Not sure how net worth is calculated? Stay tuned, because we’re going to cover all of that in this article.

     

    What is Net Worth (And Why You Should Care About It)

     

    What is net worth?

    Your net worth is the difference between your assets and your liabilities. It’s one of the most important financial metrics there is. It helps to measure your overall financial picture and track your progress toward meeting your financial goals.

     

    How do you calculate net worth?

    Your net worth is the difference between what you own and what you owe. And with a little math, it’s easy to figure out on your own. Here’s how to get started.

    1. Add up all of your assets. This includes money in your bank and investment accounts. It also includes the dollar value of any assets you own such as real estate, vehicles, or valuable collectibles.
    2. Add up all of your liabilities. Your liabilities include any money you owe. This could include student loans, credit card debt, car loan, mortgage, medical debt, back taxes, and anything else you owe.
    3. Subtract your liabilities from your assets. The difference between these two numbers is your net worth. The formula looks like this:

    Assets – Liabilities = Net Worth

     

    SEPARATE YOUR NET WORTH FROM YOUR SELF WORTH

    Thanks to student loans, most people today (nearly 70%) graduate from college with significant debt. And unfortunately, this means they’re also graduating with a negative net worth.

    Adding up your net worth for the first time and finding that it’s negative can be shocking and, frankly, a punch to the gut. Trust me, I went through that feeling myself.

    As you calculate your own net worth, please separate your net worth from your self-worth. Your net worth is just a number. It says nothing about you as a person or your value as a human. About one in five households have a net worth that’s either zero or negative.

    You can take steps to increase your net worth, but don’t wait until you do to value your self-worth.

    Read More: How to Develop a Positive Money Mindset

     

    Why is net worth important?

    You might find yourself wondering why your net worth really matters. That was me for years. I thought that my income level was far more important. After all, it had more of an impact on my day-to-day life.

    But your net worth is actually super important! It represents the big picture of your finances and gives you an idea of how you’re using the money you make.

     

    IT TELLS YOU WHETHER YOU’RE MOVING IN THE RIGHT DIRECTION

    One of the benefits of tracking your net worth every month is that you can start to notice a trend. Does the number get bigger every month? Then you’re moving in the right direction by paying off debt and increasing your savings. But if the number gets smaller each month, it’s time to make some changes.

     

    IT TELLS YOU HOW PREPARED YOU ARE FOR THE FUTURE

    People often use income as the most important metric in their finances. But your income isn’t guaranteed. If you lose your job tomorrow, you’ll be stuck relying on your savings to pay the bills. And considering many Americans are living paycheck to paycheck, the amount of money they were making no longer matters when the job is gone. 

    Your net worth gives you an idea of just how prepared you are to deal with a financial emergency like a job loss, as well as how prepared you’ll be for retirement.

     

    IT PUTS YOUR DEBT INTO PERSPECTIVE

    It’s easy to ignore your total debt and just focus on the monthly payment. This might feel better at the moment, but it doesn’t help you to pay it off any faster. By calculating your net worth, you’re forced to come to terms with the impact your debt has on your overall financial picture.

     

    IT MAY BE A FACTOR WHEN YOU’RE APPLYING FOR A LOAN

    When you borrow money, lenders want to know you’re going to be able to pay back what you owe. If you already have significant debts and not many assets, then a lender may see you as a bigger risk. You could end up being denied a loan, or get approved for a loan but have a high interest rate.

     

    How to grow your net worth

    You might be a little discouraged seeing your net worth for the first time — I know I was! For those of us graduating from college with debt, it can be discouraging to start adulthood with a negative net worth. But there are plenty of ways to boost it!

    • Pay off debt. All of your debt counts as a liability in your net worth. The fewer liabilities you have, the higher your net worth is. As you pay down your debt, you’ll see your net worth increase.
    • Automate your savings. I used to struggle so much with saving. I’d tell myself that I’d save whatever I had left at the end of the month, but then there would never be anything left when that time came. The easy solution? Automation. Set up an automatic transfer from your checking account to your savings account right after payday and you never have to worry about spending that money on something else first.
    • Start investing. Investing is a great way to boost your net worth even faster than just saving. Because rather than just having your money sitting there and adding a bit to it each month, it’s growing without you having to do anything. 
    • Cut your expenses. One of the reasons people don’t see their net worth grow each month is that, even though they make good money, they spend it all each month. By reducing your expenses each month, you can start to see your net worth grow.
    • Increase your income. Cutting expenses is great and all, but you can only do it to a point. You still have bills to pay. Plus, you don’t want to cut everything you enjoy from your budget. Instead, you can increase your income to start saving more.

    Read More: How We’re Planning to Pay Off Six Figures of Debt

     

    Tools to help you track your net worth

    Tracking your net worth regularly is an excellent way to check in on your progress and make sure you’re moving in the wrong direction. But I’m guessing you don’t want to sit down and do the math each month! Here are a few ways you can easily track it:

    1. You Need a Budget: My favorite budgeting app also happens to have a reports feature where you can track your net worth. I love watching mine change each month as I increase my savings and pay off debt!
    2. Personal Capital: This digital tool is also great for tracking your net worth. You link all of your bank, debt, and investment accounts. Then your financial dashboard reports your net worth. Plus, it’s free, so if you aren’t already using a budgeting app like YNAB, then Personal Capital is a great alternative.

     

    Final Thoughts

    I spent years thinking my net worth wasn’t really important. I focused solely on my income as a measure of my financial success. It wasn’t until I started tracking my net worth that I was able to look at the big picture and start seeing progress in my finances — progress that’s going to serve me in the future.

  • What is a Money Date + Why You Should Plan One Now

    When Brandon and I got engaged, we had some pretty lofty goals.

    We planned to plan and pay for a wedding in four months, travel to Spain for our honeymoon, pay off our non-student loan debt, and save for an RV to travel the country.

    Oh yeah, and we hoped to do it all within one year.

    While it might sound farfetched, we checked everything off this list within one year of getting engaged. And one of the most important factors I attribute to us reaching all of our goals?

    Money dates. We communicate openly and respectfully about money, and we do it often.

    I put together a guide for you to answer the questions of what is a money date and why you should plan one now to take your finances to the next level.

     

    What is a Money Date + Why You Should Plan One Now

     

    What is a money date?

    A money date is a regularly scheduled conversation between you and your partner where you discuss finances. They’re an opportunity to talk about your day-to-day finances, as well as prepare for any short or long-term financial plans.

     

    Why plan a money date

    A money date might not exactly be your idea of a romantic evening, but they’re important in maintaining a healthy relationship and healthy finances.

     

    THEY TEACH YOU TO TALK ABOUT MONEY

    First, having regular money dates gets you in the habit of talking about your finances often. And as with anything else, the more you practice, the better you get.

    Money dates also allow you to be proactive about talking about finances in a confrontation-free way. 

    Here’s how most couples communicate about money:

    They don’t really talk about it until a problem comes up. Maybe one of you overspend, you were late on a bill, or you were hit with an unplanned expense.

    When this is the case, you’re pretty much only talking about money when it’s bad news or you’re fighting. This trains your brain to believe that money is a source of conflict, and talking about money means fighting.

    Then, as your relationship progresses, you both go out of your way to avoid talking about money. This can lead to financial infidelity. It also means you’re unlikely to meet any of your financial goals together because you aren’t setting them in the first place.

    Read More: How to Talk to Your Partner About Money Without Fighting

     

    THEY HELP YOU STAY ON TOP OF YOUR FINANCES

    Even for couples who can easily talk about money, these money dates are a good way of making sure you’re staying on top of any financial changes. 

    Let’s say you and your partner set up a budget together when you got married. But a few years later, your life might look totally different. Maybe your income has increased or you’ve changed the way you spend your free time. Chances are your budget could use some refreshing. 

    Regular money dates help you to stay on top of those changes so your financial plan always fits with the rest of your life. 

     

    THEY ENSURE EVERYONE HAS A SEAT AT THE TABLE

    Finally, money dates make sure that everyone has a seat at the table. In most relationships where the couple has joint finances, there’s one person who is responsible for managing the finances. It’s also likely that one person makes more money than the other. 

    Both of these factors can cause one or both partners to feel like they don’t have equal say. Money dates can help avoid this.

    For part of mine and Brandon’s marriage, we have had a large income disparity. But in both of our eyes, we were a team, and each had equal say in our financial decisions. I believe that was possible only because of how often we communicate about money.

     

    How to plan a money date

    Now that we’ve talked about what a money date is and why it’s important that you have them, let’s talk about how to plan one.

     

    1. PLAN YOUR MONEY DATE IN ADVANCE

    I promise you that your partner isn’t going to appreciate you springing this on them, especially if you two don’t talk about your finances often. So schedule it in advance and put it on your calendar. 

    If you’re feeling particularly ambitious, you can even come up with a day of the week or month that works for both of you and set this as a recurring event.

     

    2.  MAKE YOUR MONEY DATE AS DATE-LIKE AS POSSIBLE

    One of the reasons so many of us hate talking about money is that we have negative memories associated with it. Maybe it’s that we normally only talk about money when we’re fighting, so we associate money with fighting.

    You want to make your money dates a time to enjoy. Throw on your favorite music. Eat your favorite food. Drink your favorite cocktail. If you have a favorite restaurant together, have your money date there. 

    The key is to make this an enjoyable experience so you don’t dread it.

     

    3. SHOW UP TO YOUR MONEY DATES PREPARED

    Finally, show up to your money dates prepared. Have an agenda of things you’ll discuss, and be ready with your laptop or notebook so you can do any budgeting or notetaking that you need to.

     

    What to talk about on your money date

    Now that I’ve gotten you on board with the idea of a money date, you might be wondering what you should actually plan to talk about. You might even feel like you don’t have enough to discuss to warrant scheduling time. But there are plenty of things you can discuss!

     

    TALK ABOUT EVERYTHING THAT HAS HAPPENED SINCE YOUR LAST MONEY DATE

    First, this means going over last month’s budget and seeing how well you stuck to it. If you didn’t stick to the budget, identify areas where you struggled and what changes you can make to ensure you’ll stick to the budget next month.

    There may be other things that have happened outside of your budget, too.

    Maybe one of you got a raise, and you want to discuss how you’ll allocate that new money in your budget. Or maybe one of you is feeling particularly burned out in your business, and you want to figure out if you can still meet all your financial obligations if you pull back at work a little. 

    You want to make sure you’re covering everything happening in your finances right now.

     

    CHECK IN ON YOUR PROGRESS FOR YOUR FINANCIAL GOALS AND DEBT PAYOFF PLAN

    You can use a digital or printable tracker to monitor this. On the topic of financial goals, you can also use your money date to talk about new financial goals. 

    You aren’t going to have new goals to discuss at every money date, but this is the perfect time to talk about anything new you’d like to start setting aside money for.

    Talking about your progress helps to ensure you’re staying on track. If something held you back from making much progress, you can acknowledge that and come up with strategies to address it.

    You might also discuss working a bit more aggressively toward your financial goals (or taking your foot off the gas pedal a bit).

     

    BE READY TO HAVE TOUGH CONVERSATIONS

    Now whether you’re married or dating, I’d be lying if I said that money dates won’t sometimes lead to arguments. Money can be an incredibly sensitive topic, and it’s likely that you and your partner won’t see eye to eye on anything. Be sure to come to these dates with an open mind.

    Additionally, be solution-focused. Let’s say that you and your partner have a money date and discover that they overspent last month. 

    Judging or berating them isn’t going to change what happened. Rather than focusing on the problem (your partner overspending) focus on possible solutions.

    During these money dates, it’s important to use the opportunity to bring up anything that might be weighing on you. Sure, confrontation – especially around money – can be uncomfortable. But it’s far worse to let it continue to weigh on you and eventually become an even bigger problem.

     

    END ON A HAPPY NOTE

    As I said earlier, you want to make sure that these dates create positive associations around money. If they always end with fighting, you probably aren’t going to stick with them very long. 

    End the date by celebrating your financial wins or talking about what you’re most excited about for the upcoming month. This is a great way to end the date in a good mood.

     

    Should you have money dates if you’re not married?

    Now you might be wondering whether a money date is still necessary if you’re not married. After all, if you don’t have a joint budget or shared debt payoff plan, then you might think you won’t have anything to talk about.

    Here’s my general rule of thumb — If you’re planning on spending your lives together, incorporate money dates into your month. Topics you can talk about if you’re not married include:

    • How you split expenses and whether this system still works. 
    • Progress you’ve each made on your individual financial goals and debt payoff plan
    • Progress you’ve made on shared financial goals
    • Ideas you might have for future financial goals

    Another really great way you can use these money days if you don’t share finances yet but plan to someday is to talk about what that might look like. Talk about how you’ll handle certain situations, like debt you each brought into the relationship.

    Talk about who will be responsible for managing the money or if you’ll always do it together. Consider making mock budgets to see what joint finances might look like for you.

     

    Final Thoughts

    Finances can be one of the most significant sources of conflict in any relationship. If you’re married or have been with your partner long enough to tackle financial topics, I’m sure you can relate.

    Regular money dates are one of the best ways to take the conflict out of talking about money — and you might even start enjoying it!

  • Should You Save For Retirement While Paying Off Debt?

    When Brandon and I got married, we had more than six figures of debt between the two of us. We both had student loans, and I was still paying off the credit card debt from my divorce.

    One of the very first things I did after our wedding day was sit down and make a list of all of our debts. I wanted to put together a debt payoff plan ASAP.

    One of the questions I struggled with was how much, if any, we should continue to put toward retirement while paying off debt.

    Working for the state government, I was required to put at least 6.5% of my income toward my retirement account, and the state would match it. But we also had Brandon’s retirement account to consider. Not to mention, once I left my job to run my business full-time just four months after the wedding, I was on my own for retirement savings.

    I’m not the only one to have struggled with this decision — it’s one of the most common questions I see from those trying to figure out their finances. And considering some personal finance experts still teach that you shouldn’t put a dollar until retirement until you’re debt-free, it’s understandably confusing.

    In this article, I’m going to lay out a few basic guidelines for you to follow when figuring out how to save for retirement while paying off debt. But ultimately, everyone’s situation looks different, and you have to do what’s right for you.

     

    Should You Save For Retirement While Paying Off Debt?

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.

     

    Contribute enough to get your employer match

    Many employers offer to match up to a particular percentage of your income that you contribute to a company 401(k) plan. For example, your employer might say they’ll match the first 3% or 6% of your salary that you contribute.

    This match is free money and could equate to hundreds — or more likely thousands — of dollars per year.

    Not only is your employer match essentially a 100% return on your investment, but it’s also a part of your total compensation. Turning this match down is essentially asking your employer to reduce your annual pay.

    If your employer offers a 401(k) match, make this your first priority. Depending on the type and interest rate of your debt, contribute just enough to get the employer match. You can always increase it later when your debt situation is different.

     

    Pay off high-interest debt

    The interest rate on credit cards is brutal. For young people, it can often be anywhere from 20% to 25%. Interest this high makes it incredibly hard to pay off debt. You find that each month, most of your money is going toward interest, and barely any of it is going toward the principal balance.

    And it’s not just credit cards with high interest. I’ve seen plenty of student loans, car loans, and personal loans with interest rates above 10%.

    If you have high-interest debt (which I’d consider anything above 6 or 7 percent), prioritize that before increasing your retirement savings. With more money available in your monthly budget, you can pay well above the minimum payment and pay it down a lot faster than you otherwise would have.

    The reason to prioritize these debts above saving and investing is that the interest rate on them is higher than the rate of return you’re likely to get in your retirement account. If your retirement account is seeing an 8% return rate and your debt has an interest rate of 20%, you really aren’t making money — you’re losing money.

    Read More: How to Pay Off Credit Card Debt Fast

     

    Consider the interest rate of your debt

    Once your high-interest debt is gone, you’re probably left with student loans, car loans, or a mortgage with rates of anywhere from 3% to 6%.

    Once you get to this point, it’s a good idea to increase the amount you’re contributing to your retirement accounts.

    Why?

    Because, at this point, the rate of return you can get on your investments is likely higher than the interest rate you’re paying on your debt. If your retirement account sees an average 8% return and your student loans have a 4% interest rate, you’re making more on your investments than you’re losing on loan interest.

    For each individual debt, consider the interest rate. Is it higher or lower than the average stock market return (which has been about 10% annually over the past century)?

    Another reason to save for retirement if you can — retirement accounts are tax-advantaged. Depending on the type of account, this means that you either aren’t paying taxes on the money you contribute or you contribute money post-tax and then won’t pay taxes when you withdraw it. 

    Read More: Debt Snowball vs. Debt Avalanche: Which Debt Payoff Strategy is Right For You?

    I do want to acknowledge that there’s an emotional component to paying off debt. Regardless of the interest rate on your debt, it may be weighing on you too much to prioritize investing, and that’s okay.

    Personal finance isn’t always about doing the thing that will get you the best return in the long run. Sometimes it’s about doing the thing that will bring you the most happiness and peace of mind.

     

    How to save for retirement while paying off debt

    So you’ve decided that you want to contribute to retirement while paying off debt. Great! But where do you start?

    First, sit down and look at your monthly budget. After you account for your monthly bills, how much is left? Once you know how much money you have to work with, treat both your retirement savings and your debt payoff as a line item in your monthly budget.

    Deciding how much to contribute to each is up to you. But there are a few tools I recommend to find some guidance in this area:

    • Undebt.it: This debt payoff tool allows you to add all of your debt accounts, and then it helps to design a debt payoff plan for you. It helps determine which order to prioritize your debts in, and then shows you how quickly you can be debt-free depending on the amount you put toward debt each month.
    • Personal Capital Retirement Planner: There are plenty of retirement calculators out there, but this one is my favorite. You input information such as your annual income, current retirement savings, age, and desired income during retirement. Then it tells you whether you’re on track to reaching your retirement goals and how much you should contribute each month to get there.

     

    Final Thoughts

    One of the reasons it’s so hard to find the perfect personal finance advice is finances are just that — personal. What works for someone else may not exactly work for you, and vice versa.

    That’s why it helps to look for general guidelines, and then you can adapt them to fit your specific situation.

    Debt and retirement, in particular, are some of the more stressful financial topics we all face. You want to make sure you’re putting enough money toward each, while still having money in your budget to enjoy your life.

    Trust me, I understand the struggle!

    I talk to so many people who want to know if they should pay off debt or save for retirement. And as you can see, you can do both!