top of page

DM 82 - Cracking The Code - The Best Budgeting Strategies

noemedagatan

What is the best way to budget? Hey, it's Jon from Financial MD, welcome to today's Didactic Minute.

 

We talk about budgets all the time. Step 1 of our Resident Roadmap is Cash Flow, figuring out a budget. That's huge because we have to know what's coming in and what's going out, right? Well, what's the best way to create a budget? Do you have to know what's coming in? Yes. Do you have to know what's going out? To a certain extent. Now we can't always change what's coming in. If you're a W-2 employee or a hospital-employed physician or a resident, you can't control your income necessarily. Now, hopefully, that income goes up over the years – that's always good, but that's the one area we can't control today. But what we can control is what's going out. So when creating a budget, we're able to work with what's coming in that sets up the framework certainly and not just knowing your salary but looking at your pay stub to say what actually hits the bank account – most of us know that – and then what are the fixed expenses that I have to work with and then what are the things that I can put in the discretionary column…kind of the extra stuff. Now it's stuff that all of us do. So some may argue that it's fixed but that may be more of a variable item. So we start with what's coming in – we know that. We start what has to go out – our rent, our mortgage, our utilities, our things that we really can't change; they're pretty fixed every month. And then we add the things on top of that that can fluctuate – how much in groceries, how much in going out, how much in other crap that we buy or Amazon or whatever. And we add those up and see, thirdly, is there anything left over.

 

Now we want to see stuff left over for sure but what's more important today is how do we create a budget that we actually stick to and I want you to use a few tools that are available to you. Monarch Money is a big one that's coming out this year and I want to highlight that because Mint, one we've recommended in the past, is shutting down. I don't know why; it just is. Rocket Money is another good one that will help to categorize your spending. You can see where your money is actually going. Because once you set a budget, it helps to know if you're actually sticking to it and that's the way to do that. Now a lot of people just use an Excel spreadsheet and they check their bank statements or their credit card statements or receipts or whatever the case might be. If that works, awesome. But all I'm saying to you is you do need a tool. You can't just use mental math to do this. So creating a budget that you're going to stick to means getting the right tools, instilling the right habits and disciplines in your life. If you want to change things, you've got to do things differently and you have to do different things. So this is one of those areas.

 

So, check out our stuff. If you shoot us a comment below or direct message us, we have some budget tools that we've created – quick spreadsheets with the right formulas to figure out how much you should be spending, what's left over, what your emergency fund should be – all those things. So, send us a message. We'll get that to you.

 

Again, this is Jon from Financial MD, we'll see you next time.

 



 
 
 

Comments


Contact Us

325 E. Grand River Ave.

Suite 250

East Lansing, MI 48823

(888) 517-1663

info@financialmd.com

Links

  • Twitter
  • TikTok
  • Instagram
  • LinkedIn
  • Facebook
  • YouTube
Financial MD

© 2024 by Financial MD, LLC

Investment advisory services offered through FinancialMD, LLC, a Registered Investment Adviser. Registration as an investment adviser does not imply a certain level of skill or training. This website is provided for informational purposes only and nothing contained herein should be construed as a solicitation to buy or sell any products. Advisory services are offered only to clients and prospective clients in places where FinancialMD and its investment adviser representatives are registered or exempt from registration. Investing involves the risk of loss of principal. Past performance is no guarantee of future performance and no investment strategy can guarantee profit or protect against loss. FinancialMD does not provide medical advice, nor are any of it's personnel medical professionals.

bottom of page