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Financially Fit Status Update...

My New Year's resolution for 2012 included being "Financially Fit." If you didn't read my blog for that week, here's the link http://www.seebelieveandachieve.com/2012/01/2012.html or you can scroll through down find what changes I've committed myself to working on for 2012.

I am happy to report that things are on track thanks to a budget formula from finance guru Suzie Orman (LOVE her!). About two years ago, I watched a special where she provided this budget tool. It has put my spending habits in check and keeps me focused on reaching my goal to be financially fit. I have found this to be helpful, but you may need to make adjustments according to your own situation. However, it is a great start!

Having my finances in order helps to keep my mental health balanced, especially during tough economic times. I hope you find the information below helpful and that it aids to get you back on the money track. I'm sure am glad I wrote her formula down at the time, because I have had no luck finding anything online regarding her budget formula (phew!). Ready, set, go!

Big hugs,
Ane :)


Suzie Orman Budget Formula:
  • Get a journal to keep a list of all your monthly expenses. Place the month on the top and the date. 
    • Use your journal to list all bills. After you make a payment put the date and any confirmation numbers next to the item. Being organized is SUPER helpful when you're trying to get financially fit. 
  • Set time to pay bills.
    • I set aside no less than an hour to do this and I try not to make any purchases before doing this. The sooner you make your budget, the more aware you will be as to what you can spend.
    • Be honest. It can be a little overwhelming, but remember we have to start somewhere.
    • Start by taking the total amount of net income you bring in each month.
    • Use the formula below to calculate just how much you should be spending in each area. Depending on your own situation, you can work around it to fit your budget/spending
% Budget Formula:
Percentage is based on net income and what should be spent in each area. 
30% : Rent/Mortgage Payment 
16% : House hold expenses (utilities, internet, phone, etc.)
13%: Transportation (car payment, insurance, gas)
10%: Entertainment (movies, dinner w/friends, etc.)
10%  Savings- This amount should go directly to a savings account, preferably one you have limited access to. 
10% Debt Payment (credit card bills, parking tickets, etc.)
7%: Groceries
4% Miscellaneous (emergency funds such as tire repair, plumber, fees) 


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