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Exercise your budgeting muscles to achieve financial health
Five easy steps for creating or updating a healthy budget
When we follow the same exercise routine for a while, we might stop seeing results unless we make an adjustment to our plan. Staying in shape financially also begins with a plan—a budget.
We covered steps one and two on Monday's bulletin and will wrap them up on Friday.
Step 3: Compare your expenses and income. Consider your priorities and goals.
Since we're doing math, there are three possible answers when you compare your expenses and income—and you thought there was only one!
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You have money left over after covering all your expenses. If that is the case, you will want to decide what to do with the extra money. Consider your financial goals. Do you need to add to your emergency fund, invest more for retirement, save for your child’s education or for a vacation, or pay down your debt further? Check out the Employees Retirement System of Texas (ERS) website or the U.S. Securities and Exchange Commission website for helpful financial planning tools.
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Your income equals your expenses. If you ended up with all your expenses covered and nothing left over, that is not necessarily a bad place to be. Just be sure you have something in your budget allowing you to set aside money for emergencies. Read more on building an emergency fund on the Consumer Financial Protection Bureau website.
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You do not have enough to cover all your expenses. If this is where you find yourself, don’t despair. There may be things in your budget you can reduce or get rid of temporarily (think memberships and subscriptions). Perhaps others in your household can contribute (for example, a working teen can help pay for auto insurance). For ideas and resources for getting out of debt, visit the Federal Trade Commission Consumer Advice website.
Helpful tip: This is the perfect time to review your financial goals. Is your current plan helping you reach those goals? It may be time to adjust your budget or try an entirely new plan. The "Experts: 4 Steps To Achieving Your Financial Goals for 2023" article may help with goal planning.
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Baby steps to financial freedom with Nick Daugherty
Daugherty paid off $80,000 in consumer debt in two years using simple strategies and hard work. He tells his story of acquiring debt, clawing his way out of it and financial pitfalls. Daugherty shares his program for first responders to build financial strength and achieve financial freedom.
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TXERS Wellth to 468311
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