Every Household Should Have a Budget. In the Getting Started blog, you were tasked with tracking all of your expenses for a month. In the Step 2 Blog you were to look at your spending in relation to some general guidelines for how your money should be spent. Please keep in mind that these are general guidelines. It should be adjusted to meet the needs of each household.
Now is the time for us to discuss some specific topics about budgeting. I would first like to start with savings. The general rule of thumb is that your savings should equal 3-6 months income. So if you make $5000 a month, your liquid savings should equal $15,000-30,000.
Now, here is something to think about when you start saving. Most banks are NOT offering a great deal of interest on savings accounts and in fact, if you don't have a checking account tied to the savings account, there may be monthly fees or minimum balance requirements. Talk with your current bank, and maybe even shop around to find the best deal. The one thing you don't want to happen is your saving account to lose money because of monthly fees.
The other option might be a money market account, again check on minimum balances and fees.
For the other blogs in this series, please click on the links below: