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  • Writer's pictureRotchford & Associates


Budgeting is a simple concept. Know how much you have coming in, compare it to what you have going out, and budget to make sure the number coming is larger than the number going out, right? Right. Now who do you think of when you think of the types of people needing to budget to manage their money responsibly? Probably those making minimum wage, maybe those that have a stay at home spouse, or a family trying to put their kids through college? All of these could be the case, but what you need to realize is budgeting is more than just making a list, it’s knowing what you have in detail. Americans as a whole tend to live paycheck to paycheck and that doesn’t matter if you’re making minimum wage or have a six-figure salary.

Let’s say your not in a any of those positions mentioned earlier and you make plenty of money. Enough to have a decent savings, go on vacations, pay off credit cards monthly, essentially enough to live your life without worrying about having to budget to get by. What should you be doing in terms of budgeting?

Start with the basics. Have a simple list of where your money is going on a monthly basis. You don’t have to track fuel, food, etc. just know what bills are due and their amounts. The money going out becomes more real when you write down the number yourself. Are you happy with these numbers? Did your cell phone payment double while you weren’t watching, but you didn’t care in the past because you could afford it? Just because you can afford something doesn’t mean you should have to. Look for ways to cut costs that you feel are too high, even if you can afford them the way they are.

Next look into what you’re making. Is your brick and mortar bank offering you a fraction of a fraction of a percent? Look into online banks. Are there fees and commissions with your stock accounts? Many platforms offer free trading now. Do you have an old 401k that you never rolled into an IRA? Do you know what spread they’re charging you through the 3rd party admin? Take this time to familiarize yourself with any fees or interests made in your accounts. Figure out how much of what you have is at risk and if you’re comfortable with where you’re at.

So that covers knowing what you have which is very important, but let’s look into budgeting for retirement savings too. Again, if you’re in a position that you make so much money you don’t need to budget, does that mean you’re using some of that income for retirement savings? Probably not. The “Report on the Economic Well-Being of U.S. Households in 2019” shows that barely half of Americans have a 401k, 403b, 457, or any other defined contribution plan. Only one-third have a separate IRA, one-fifth have a pension, and the scariest number is one-quarter don’t have any retirement savings at all. These numbers show how dependent we are on 401ks and how little we do outside of them.

If you make enough to not worry about budgeting and have plenty of money to cover your bills then change your mind set on retirement savings. Start looking at extra savings as a bill. Something that has to be paid monthly. Once that "bill" is covered, feel free to spend away. Your future self will thank you!

What should your take away from this be? Know what you have, know where you want to be, and make a plan. For more information on financial planning such as this, give call us at (623) 523-0444 or email us at or

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