Description

Wouldn't it be great to be able to manage your expenses without feeling like you were on a budget? Here to help us create an easy to understand method for running our household, is financial expert, Maribel Aber.

Transcript

Audra Lowe: Alright, now it's time for your money. Wouldn't it be great to be able to manage your expenses without feeling like you were on a budget? Here to help us create an easy to understand method for running our household, is financial expert, and former executive of the NASDAQ stock market Maribel Aber. Welcome back! Maribel Aber: Thank you! Audra Lowe: Glad you're here. Maribel Aber: Great! Audra Lowe: This is something a lot of people can relate to, everyone tries to manage their finances effectively and efficiently, but it's tough, you have a method though you call the Anti-budget. Maribel Aber: Yes, it's the anti-budget, because when I think of budget I think I have died and that's not a good one, oh I can't do it. So we want to think about is, it's just a way of managing your expenses. Okay? It's just -- I like let's say being able to portion out what we are earning, and that's the way we're calling it compartmentalize spending. Audra Lowe: Okay, I like the way that sounds. So there are certain categories that you have there, right? Maribel Aber: Exactly. A lot of financial experts out there actually promote this, and it's all about changing kind of the way you think about money. It's changing your life style, it's a conscious kind of spending and there are four main categories. So the first category is the biggest. So the income your salary, the hard cost, 60% should go to what's called fixed cost, hard cost. So what is that? That's your rent, that's your mortgage, that's your debt. Other things that you need to pay to sustain that does not include your gym membership or the nail salon. Audre Lowe: Those are extras. Maribel Aber: Those are extras. There might be monthly cost, but those don't found to that bucket. Audre Lowe: Okay. Next you also say that we should allocate about 15% towards our retirement in long term savings? Maribel Aber: Yes, 15% and I know that retirement and long term savings are not sexy, it's definitely something that we need to be thinking about. We need to be thinking about early. So just to know that the earlier you start, the more that you can actually grow in your savings, in your investments. Always remember, I like to always throw this out there, your 401K contribution and your earnings are not taxable income. So that has more time to sit and earn some interest because you don't get tax on it until you withdraw the funds. Audra Lowe: Okay, and then another percentage obviously, you should go to emergency funds, right? Maribel Aber: Exactly, that's something people forget about, like 15% should go towards, it's called emergency or short-term savings. So it's not just that oh, my gosh, I have to pay for snow tires, I didn't know about it, but it's also oh my gosh, Christmas is around the corner, I don't want to rack up my credit card bills, I should have something in place. So it is just kind of planning for it, having a little bucket for that. Audra Lowe: According to my calculations you still to have about 10% less, can we put the mails or the fun things in there? Maribel Aber: Yes, exactly. 10% I say, it's not just about bills and savings, it's also about having fun. So go ahead and if you want, design your duds, you want to vacation, pay yourself that 10%, you should be able to enjoy you, aren't you? Audra Lowe: Exactly, it seems pretty straightforward, but you pretty much have to know what you are starting from as far as your salary is concern and then plan accordingly, right? Maribel Aber: That's right. Audra Lowe: Right? Maribel Aber: That's right. It's about having a plan and then having periodic goals that you can need each month. Audra Lowe: Right, it all sounds pretty straightforward. What's the main thing that you want viewers to take away from this? Maribel Aber: Well, the main thing is that I'd like people to understand it's all that being methodical, having a strategy and a plan in place. Know that you know the largest chunk of your salary, your income revenue should go towards your fix cost, that 60%, and know that everything else you pay yourself. So you pay yourself for your retirement, you pay yourself for your short term savings and pay yourself for having fun too. Audra Lowe: Right. You will thank yourself in the long run. Maribel Aber: That's right. Audra Lowe: Thank you so much Maribel, good to see you again. Maribel Aber: Thank you! 3