Abigail Loja of Texas works as a finance industry professional, and in the following article, explains how with strategic budgeting, investing, and saving anyone can turn their finances around.
Managing finances can be tough, especially today. Not to mention that sitting down to plan it out can be daunting. However, there are a few simple tricks anyone can use to master their finances.
Budgeting, investing, and saving are crucial for well-managed finances. When budgeting, follow the envelope, zero-based, or a 50/20/30 strategy. When investing, try growth, buy-and-hold, or index investments. When trying to save break down yearly costs, improve efficiency, and set goals.
Learn more about these strategies and how to execute them below!
Abigail Loja Provides Three Strategies for Budgeting
Any good budget will take time and effort–both to set up and to maintain. However, once this is done, the benefits will be manifold. To get started there are a few proven strategies to choose from. These strategies approach the same budgeting goal from different perspectives.
- Envelope strategy
- Zero-based strategy
- 50/20/30 strategy
The envelope strategy involves setting aside money each month for specific purposes. This can be done with a physical envelope and cash or with digital tracking. The strength of this strategy is the visual aspect, however. Seeing each envelope gradually get smaller can encourage frugality.
Abigail Loja of Texas says that the zero-based strategy starts from the opposite side as most budgeting strategies. Start counting all of the expenses for the month up from zero. When bills and groceries have been accounted for, budget for saving and any other expenses. This method is great for individuals with variable incomes.
Lastly, the 50/20/30 budget simply breaks down one’s monthly income into three categories. Half of the budget goes straight to necessary expenses such as bills and groceries. The other half is split between savings and personal desires. The greater portion can go to either depending on the individual’s frugality.
Investing Strategies
Abigail Loja of Texas explains that investing one’s money can seem like a gamble to beginners. In some cases it truly is. That said, there are plenty of safe ways to invest wisely. An investment advisor can be helpful but not always required.
- Growth investment
- Buy-and-hold investment
- Index fund investment
Growth-focused investing is similar to the stereotypical risky investments that movies like to portray. Instead of jumping on a bandwagon, this strategy promotes a close analysis of a company’s current position and likelihood for growth.
Buy-and-hold investment, on the other hand, is a slow and methodical approach to investing. For this strategy, all investors have to do is find a reliable stock that consistently trends upwards. Individuals following this strategy must be mindful to not worry about temporary dips.
Abigail Loja of Texas says that another safe investment strategy is
index fund investment. Like the previous strategy, index funds are a steady investment with low risk. This style of investment typically involves a portfolio manager. These investments are well diversified and function best similarly to a buy-and-hold.
The Low-Down on Saving
While saving is a part of budgeting, it can be difficult enough to deserve a focused approach. Much of the difficulty of saving depends on one’s situation. That said, determination and being frugal will go a long way.
- Analyze annual expenses
- Improve efficiency
- Set a goal
Abigail Loja of Texas explains that monthly budgeting is incredibly helpful. In addition to this, looking at one’s expenses from a yearly view can put things in perspective. Small weekly purchases, such as nights out at the bar, can quickly add up. This isn’t to say everyone should give up their pleasures but to be mindful of them.
Another great saving method is a little counterintuitive at first. Spend some money to improve the
efficiency of the utilities at home. Inefficient heating, cooling, and water usage is just wasted money. This is a method best applied to a long-term living situation.
Finally, just as when budgeting, it is important to set goals. Having a savings goal can provide the motivation to save money instead of spending it on something else. Long-term or short-term, consistently set goals and work towards them, says Abigail Loja of Texas.
Final Thoughts
Abigail Loja of Texas understands that it is not easy to save money. It takes hard work and dedication. After creating a good budget, looking into investment opportunities, and making a savings plan, one can begin to master their finances. The above proven strategies will be helpful but cannot do anything without commitment.
